Quarter Enterprises Pty Ltd v Allardyce Lumber Company Ltd [2009] SBCA 15; CA-CAC 5 of 2009 (22 July 2009)

IN THE COURT OF APPEAL OF SOLOMON ISLANDS

Appeal No.5 of 2009

BETWEEN

QUARTER ENTERPRISES PTY LIMITED
(First Appellant)

AND

RONALD HARRY GIBBS
(Second Appellant)

AND

ALLARDYCE LUMBER COMPANY LIMITED
(First Respondent)

AND

JOHN HENRY HOWDEN BEVERLEY
(Second Respondent)

The Court: Sir Albert Palmer Chief Justice, McPherson JA, Williams JA

Advocates: Mr King; Mr Sullivan QC, Mr Kingmele

Date of Hearing: 22 July 2009

Keywords:

Appeals - Costs order against - Principles on appeals - Bank guarantee - Bank not party to proceedings - Order against bank

Costs - Basis of assessment - Indemnity basis - Power to award - Circumstances -Rule 24.12.
Costs order - Against non-party - Body corporate - Controlling mind - Joint and several liability for costs - Rule 24(18)(f)

Practice - Security for costs - New trial- Non-compliance with order - Stay of proceedings - Dismissal for not prosecuting new trial- Rules 9.13, 9.14, 24.57

REASONS FOR JUDGMENT

McPherson JA
#/08/2009

Sequence of Events

The legal proceedings leading to this appeal started with the issue in 2000 of a writ (Case no. 208 of 2000) in which the plaintiff (claimant) Quarter Enterprises Pty Ltd, a company resident in Australia, sued Allardyce Lumber Company Ltd and two of its directors, whose names are Beverley and Minchin. The claim was for damages for breach of contract, fraud, negligent misstatement and conspiracy, arising out of an agreement, made in 1996 and partly performed in 1996 and 1997, to supply round logs from this country for shipment abroad. In 2005 the action was tried in the High Court at a hearing occupying 35 sitting days and extending over some seven weeks. It culminated in April 2007 in a judgment for the plaintiff (claimant) in an amount of some US$2.8 million together with interest and costs.

Against this judgment the defendants appealed. The hearing of the appeal lasted for five days in October 2007 and resulted on 12 March 2008 in a judgment allowing the appeal. The Court of Appeal set aside the judgments at trial. It dismissed the claim against Minchin and gave final judgment with costs in his favour. Against the remaining two defendants the Court directed that a new trial be had, and ordered that their costs of the first trial should abide the event of the new trial. It also ordered that the plaintiff pay the defendants’ costs of the appeal.

The present appeal, or application for leave to appeal, is brought from a decision dated 20 May 2009 of Goldsbrough J sitting in chambers as a Judge of the High Court, by which he dismissed for want of prosecution the plaintiffs action in Case no. 208 of 2000. He also ordered that the defendants’ costs of the first trial fixed at US$436,733.97, be paid within a month of the order jointly and severally by the plaintiff and one Gibbs (who was and is a director of the plaintiff). In addition, the Judge ordered that the costs of the application before him and assessed at SB$35,800 be paid jointly and severally by the plaintiff and Gibbs. As well, the ANZ Bank was "pursuant to its bank guarantee in favour of the High Court dated 8 December 2008" ordered to pay the sum of SB$200,000 to the trust account of Sol - Law, solicitors for the defendants. This sum was to be applied in reduction of the costs ordered to be paid by the plaintiff and Gibbs on account of the costs of the first trial. Those trial costs had been assessed at US$473,693.97, less the sum of US$36,960.00 representing the US dollar equivalent of SB$300,000 already due to the defendants under a bank guarantee provided as security for the costs of the first trial.

Security for Costs Order

The two sums of SB$200,000 and $300,000 call for further explanation. Under an order made by the Registrar on 4 August 2004, which was well before the trial and the appeal, the Registrar ordered that the plaintiff increase the existing security of SB$200,000, already provided for the costs of trial, by an additional SB$300,000, so as to bring it to a total of $500,000 all up. However, in arranging a bank guarantee for the additional sum of $300,000 the existing guarantee for $200,000 was somehow inadvertently cancelled. In order to cater for this shortfall, para 4 of the order made by Goldsbrough J on 10 November 2008 required the plaintiff by 26 November 2008 to provide further security of $200,000 to bring the total back up to $500,000. This was not in fact done by the date specified, but on 5 December 2008, the Bank advised that the necessary bank guarantee was being established. Paragraph 6 of the order made by Goldsbrough J on 20 May 2009 retrospectively required the Bank forthwith to pay to Sol-Law trust account the missing sum of $200,000 pursuant to its bank guarantee in favour of the High Court. The amount had been received on 8 December 2008.

On this appeal the complaint is made in para 4 of the draft notice of appeal that his Lordship was wrong in ordering the Bank to pay that money to the solicitors’ trust account, when neither the Bank nor the defendants’ solicitors were parties to the litigation in Case no. 208 of 2000. In fact, however, what appears at p 155 of the Appeal Record shows that the Bank guarantee in use in this case, and no doubt others, takes the form of a promise to pay on demand to the "Principal" (who is identified as the High Court of Solomon Islands) the amount of the guarantee, and to do so without reference to the "Customer", who is or are there named as "Gibbs/Quarter Enterprises". That is to be so even if the Customer gives the Bank notice not to pay on the guarantee.

So what the Bank in fact did was on demand to pay to the defendants’ solicitors’ trust account (for which the $200,000 was ultimately destined), rather than directly to the High Court for disbursement to that trust account. See para 6 of the Order of 20 May 2009. This was no doubt done to avoid unnecessary circuity in payments; but, whatever the reason, the Bank, the High Court, the defendants and their solicitors have all acquiesced in the procedure adopted. The sum, which was due, has been paid, and the plaintiff as the Customer under the guarantee had no right to intercept it. There is therefore no occasion for the complaint put forward in ground 4 of the draft notice of appeal.

The fate of the security for costs orders

In sequence, the next order with which the plaintiff did not comply was made by the Chief Justice on 11 August 2008. The first paragraph of that order required the plaintiff Quarter Enterprises Pty Ltd to provide additional security for payment of the defendants’ costs of the forthcoming retrial. It was fixed in the sum of SB$1,216,037.31 and was to be provided by means of a bank guarantee in favour of the Registrar. Paragraph 2 ordered that the security in question be given within 21 days (ie, by 2 September 2008), in default of which all proceedings on the part of the plaintiff were to be stayed until it was given; but with the defendants being at liberty during such default to apply to have the action struck out. His Lordship further ordered that any additional statements to be relied on at the retrial were to be filed and served on other parties by 31 October 2008. The trial itself was listed for 5 weeks hearing beginning on 10 November 2008 at 9:30am. A particular judge was in fact nominated for, and assigned to, that hearing. There has been no appeal against, and no application at any time to vary in any way, the Chief Justice’s order of 11 August 2008.

Security for costs under the order was required to be given by 2 September 2008. It was not provided by that date, with the consequence that further proceedings on the plaintiffs part were stayed in terms of the order of 11 August 2008. The next hearing in the matter came before Goldsbrough J on 10 November 2008, when a series of orders was made. On that day Mr Radclyffe, a local practitioner who had appeared as junior counselor solicitor for the plaintiff at the first trial and on the appeal, asked leave to withdraw as solicitor on the record for the plaintiff. Leave to do so was granted conditionally on his satisfying certain requirements with respect to service on the Sydney solicitors Messrs Hayes Partners acting for the plaintiff. A direction for payment by the Bank of the missing $200,000 under the Bank guarantee pursuant to the Registrar’s order of 4 August 2004 for security for the trial costs was also included in the order made on 10 November 2008. The application itself was then adjourned for 25 days for further hearing on 5 December 2008.

On that and the following day the hearing of the application previously adjourned on 10 November continued before Goldsbrough J. It was the same application originally made by the defendants and Minchin by notice dated 20 October 2008. It is the application seeking an order that the action be dismissed for want of "jurisdiction" (meaning "prosecution") on which the order for dismissal that is now the subject of appeal was made on 20 May 2009. For the plaintiff (claimant) Quarter Enterprises, Mr Hayes, of Hayes Partners of Sydney, appeared. Mr Gibbs, against whom costs orders were now being sought by the defendants and Minchin, appeared in person. On the present appeal there has been an indignant complaint that none of the several practitioners in Honiara who were approached to act for the plaintiff on the application had proved willing to do so. We are not told why; but it could have been due to the fact that they knew that Mr Radclyffe’s withdrawal had been due to his inability to obtain instructions from the Sydney solicitors for the plaintiff; or it may have been suspected that the plaintiff was still insolvent as it had been found to be by the Registrar as long ago as 4 August 2004. On behalf of the plaintiff on this appeal, this state of its financial affairs was effectively confirmed by Mr King of counsel, who said the plaintiffs claim against the remaining two defendants was the plaintiffs sole asset. In any event, Mr Hayes, who appeared for the plaintiff on 5 December 2008, is himself an admitted practitioner of the High Court of Solomon Islands and he had instructed on the previous appeal heard in October 2008. In addition, Brisbane, with over 700 barristers, is only 3 hours flying time from Honiara. All of this might have been avoided had Mr Radclyffe’s plea for instructions received a timely response from Sydney.

Personal Orders for Costs

The order that was made on 20 May 2009 determined several matters. In addition to dismissal of the action, the defendants’ costs of the first trial, which were assessed and fixed at the sum of US$419,053.26, were ordered to be paid within one month of the order, together with the costs of the application itself fixed at S8$35,800. The order that these costs be paid jointly and severally by the plaintiff and Gibbs was challenged in ground 3 of the draft appeal. Gibbs, of course, was not a party to the action as originally constituted, but was added only on the matter of costs. Rule 24.17 provides that a court must not make an order for costs in a proceeding against a person who is not a party to it except in accordance with rule 24.18. That Rule (24.18) authorises the court to make an order, including an indemnity costs order:

"(f) for costs against a person who is the effective controlling mind of a body corporate against whom a costs order is made".

An order with respect to the costs of the appeal had been made against the plaintiff by the Court of Appeal in its order of 12 March 2008. As to the remaining requirement of Rule 24.18(f), at the hearing before Goldsbrough J, Mr Gibbs himself asserted that he was the controlling mind of the plaintiff. When, as the learned Judge records, Mr Hayes for the plaintiff sought to stop him from making this concession, Mr Gibbs persisted with it. Quite apart from this statement, there was evidence at the first trial that, in the absence of Mr Gibbs, no decision could be taken by the plaintiff. His Lordship’s conclusion that Rule 24.18(f) was available here was therefore correct. Ground 3 in the plaintiffs written submission is that an order of the kind made against Gibbs may not be, or ought not to have been, made retrospectively after the trial; but it is quite clear that such an order is within the contemplation of Rule 24.18, as can be seen, for example, from the terms of Rule 24.18( c). It provides for an order against someone who has committed an abuse of the court’s process that caused or inflicted cost upon a party to the proceeding. That is something that, of course could ordinarily be determined only after the trial was over.

Among the various paragraphs of Rule 24.18 there are some others that the defendants claim are applicable to the conduct of Gibbs at the first trial. They also suggest that the order against him was justified at common law independently of the Rule: See Aidin Shipping Co Ltd v Interbuilt Ltd [1986] 1 AC 965, and Aerolift International Ltd v Mahoe Heli Lift Ltd [2001] SBHC 139. It is not necessary to pursue these submissions in detail because the jurisdiction under Rule 24.18(f) is plainly apparent in this instance. In Carborundum Abrasives v Bank of New Zealand [1992] 3 NZLR 757, 764, Tomkins J said in effect that the corporate "veil" is not readily removed; but the potential exceptions to corporate personality recognised in Rule 24.18 are statutory and quite specific. It may be added that some of the plaintiffs written submissions in para 11 appear to be directed to orders for security for costs, which is not the issue at this juncture. We consider that his Lordship did not exercise his discretion incorrectly in deciding that Mr Gibbs ought be ordered to pay costs along with the plaintiff. There are limits on the extent to which the corporate veil is capable of protecting individual wrongdoers: see Standard Chartered Bank v Pakistan National Shipping Corporation [2002] UKHL 43; [2003] 1 AC 959. It is just such an exception that has now been enacted in Rule 24.18(f). It follows that Ground 3 of the draft cannot be sustained.

Indemnity Basis of Costs Orders

Goldsbrough J also ordered that the costs awarded should be paid on an indemnity basis instead of on the normal standard basis. The indemnity basis extends to all costs that are reasonably incurred and which are proportionate to matters involved in the proceeding having regard to charges ordinarily payable by a client to a legal practitioner for the work done: see Rule 24.9(b). Rule 24.12 provides that some or all of a party’s costs may be ordered to be paid on an indemnity basis if:

"(a) the other party deliberately or without good cause prolonged the proceeding; or (b) the other party brought the proceeding in circumstances or at a time that amounted to a misuse of the litigation process; or

(c) the other party otherwise deliberately or without good cause engaged in conduct that resulted in increased costs; or

(d) in other circumstances (including an offer to settle made and not accepted) if the court thinks it appropriate."

His Lordship accepted that there were findings in the Court of Appeal in terms of which three or more of the foregoing categories were satisfied in this case. In particular, the Court had disagreed with the trial judge’s findings on credibility based on file notes tendered as being contemporaneous in support of the testimony of Mr Gibbs at the trial; whereas, as the Court of Appeal concluded, the critical file note, and possibly others, were or appeared to be a subsequent fabrication. That is something about which Mr Gibbs could· not have been innocently mistaken. This would bring the case within para (c) and probably also each of the other paragraphs of Rule 24(12). An order for indemnity costs was therefore authorised by the language of the Rule. Whether or not such an order should have been made then became a matter for the discretion of the Judge. It has not been shown or alleged that the Judge’s discretion miscarried in any respect. It follows that Ground 5 of the draft notice of appeal cannot succeed.

While dealing with questions of costs it is convenient here to consider the allegation in Ground 14 that the Court erred in relation to costs "including the basis of assessment of costs". In so far as the basis of assessment is concerned, the complaint has already been discussed and disposed of in the previous paragraphs of these reasons. The written submissions of the plaintiff do not greatly elucidate or expatiate upon the present complaint except (as is true throughout those submissions) to reiterate that insufficient attention had been given to the findings of the trial judge, which, of course, were set aside by the judgment of the Court of Appeal on 12 March 2008.

Impact on New Trial Order

It is helpful now to refer to the effect of the new trial order on the status in future of evidence adduced and findings made at the first trial. The plaintiffs written submissions (para 11) say that "the vast bulk of the evidence [from the first trial] will simply be re-read". Except by consent of all parties to the new trial, this does not correctly state the law. See Hilliard: Law of New Trials (2nd ed) at 74-75, and [1963] Annual Practice, at 1687, where it is said that "the second trial is wholly independent of the first". In Roe v RA Naylor Limited (1918) 119 L T 359,362, Swinfen Eady MR said in relation to findings made at the first trial of an action of which a new trial had been ordered on appeal:

"Mr Atkinson has sought to rely upon some findings of the learned County Court judge in a former action. In my opinion he is not entitled to do that. This action was sent for a new trial, and the second trial superseded the first, and any finding in the first action is got rid of when the action is sent for a new trial"

In the same case Scrutton LJ (119 L Tat 363) recorded the fate of an objection to an offer by the plaintiff at the new trial to put in. the notes of evidence taken at the first trial. The objection was upheld. Roe v Naylor was a case in which, it may be remarked, the new trial was conducted in the same court and before the same judge who had heard and determined the first trial, and (perhaps not surprisingly) with the same result. As to this, Scrutton LJ described the response of the County Court judge as not having received the new trial order "with altogether Christian equanimity."

Appeals against Costs Orders

On the question whether the exercise of a discretion on costs will be set aside or varied on appeal, the leading Australian authority is the decision of Kitto J sitting as a single judge of the High Court of Australia in Australian Coal & Shale Employees Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621,627, where his Honour said:

"the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgment is that there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction sufficient to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance."

Specifically with reference to appeals against assessments of costs, his Honour went on at 628-629 to cite with approval the following remarks of Jordan CJ in an earlier case in the Full Court of New South Wales:

"In appeals as to costs, the principles to be applied are these. The Court will always review a decision of a Taxing Officer where it is contended that he has proceeded upon a wrong principle, for the purpose of determining the principle which should be applied; and an error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed. Where no principle is involved, and the question is, whether the Taxing Officer has correctly exercised a discretion which he possesses and is purporting to exercise, the Court is reluctant to interfere. It has undoubted jurisdiction to review the Taxing Officer’s decision even where an exercise of discretion only is involved and will do so freely on a proper case, using its own knowledge of the circumstances: Western Australian Bank v. Royal Insurance Co.; Clark, Tait & Co. v. Federal Commissioner of Taxation, but it will in general interfere only where the discretion appears not to have been exercised at all, or to have been exercised in a manner which is manifestly wrong; and where the question is one of amount only, will do so only in an extreme case".

Apart from the twin questions already discussed of indemnity costs and joint and several liability, there has been no suggestion that the primary judge made any identifiable error of principle or exercised his discretion wrongly in relation to costs. In the court below the learned judge subjected the plaintiffs bills of costs to what was described as a "line by line analysis" of the items specifically challenged. In the result, his Lordship awarded as having been proved by the defendants an amount of US$442,231.76, which was afterwards reduced to US$436,733.97 arising from minor errors in calculation that were later identified by the defendants. It also followed a discount of 10% applied by his Lordship to cater for failings on the part of the defendants in their conduct of the defence at the first trial. Beyond this, no errors were identified at the hearing or on appeal that serve to cast any doubt on the correctness of his Lordship’s findings or assessments of costs. His decision on these matters, including the quantum of particular items of costs incurred at the trial, is carefully considered and persuasively reasoned. The grounds advanced by the plaintiff in respect of paragraphs 1, 3, 4, 5, 6 and 14 of the draft notice have not been established on this appeal.

Dismissal for Want of Prosecution

We turn now to the principal matter of substance on appeal, which is the order striking out the proceedings for want of prosecution on the part of the plaintiff. These are Grounds 2, 6, 7, 8, 10, 11, 12 and possibly 13 of the draft Notice of Appeal. Relying on the speech of Lord Diplock in Birkett v James [1978] AC 297, 318, it was submitted by Mr King that this was not a case in which the conduct of the plaintiff subsequently to the new trial order merited or justified an order for dismissal of the action even though the statute of limitations might by now have expired. In his reasons in Birkett v James at 318, Lord Diplock divided such cases into two classes or categories. The first is where there had been intentional and contumelious default in proceeding in the action; the second where there has been inordinate or inexcusable delay on the part of a plaintiff.

The principles governing or guiding the power to dismiss were stated by Lord Diplock as follows ([1978] AC 297, 318):

"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 the 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."

In Birkett v James, the case there being considered fell into the second category. In the present instance, it is, if anything, in the first category. In Birkett v James contumelious default was not relied on: see [1978] AC 297, 318. As to the distinction, Lord Diplock added ([1978] AC 297, 321) the following further elucidation of the principle:

"The court may and ought to exercise such powers as it possesses under the rules to make the plaintiff pursue his action with all proper diligence, particularly where at the trial the case will turn upon the recollection of witnesses to past events. For this purpose the court may make peremptory orders providing for the dismissal of the action for non-compliance with its order as to the time by which a particular step in the proceedings is to be taken. Disobedience to such an order would qualify as "intentional and contumelious" within the meaning of the first principle laid down in Allen v. McAlpine. But where no question of non-compliance with a peremptory order is involved the court is not in my view entitled to treat as "inordinate delay" justifying dismissal of the action in accordance with the second principle in Allen v. McAlpine a total time elapsed since the accrual of the cause of action which is no greater than the limitation period within which the statute allows plaintiffs to start that action. To dismiss the action in such circumstances would, in my view, involve an error in principle in the exercise of judicial "discretion" which it is the function of the appellate court to correct."

Peremptory Orders

In the present case there were at least two and possibly three peremptory orders with which learned Judge said the plaintiff had not complied. The first was the Registrar’s pre-trial order made on 4 August 2004 for security for costs of $500,000. Due to inadvertence, the ANZ Bank may share some responsibility for non-compliance with that order in circumstances that have already been recounted in these reasons. However that may be, it was not until 8 December 2008 that the plaintiff finally complied in full with the order for security first made by the Registrar in 2004, or with the additional order made on 10 November 2008 requiring that the missing $200,000 be provided by 26 November 2008. But the most serious of the three matters remains the plaintiffs failure to comply with the order of the Chief Justice made on 11 August 2008 that, within 21 days, the plaintiff provide security in the sum of SB$1,216,037.31 for payment of the defendants’ costs of retrying the action. There has never been an appeal against that order, nor any application for an extension of time within which to comply with it.

The transcript of the notes of Goldsbrough J of the hearing on 5 December 2008 refer to a submission by Mr Hayes that the plaintiff did not wish to tie up the money for this length of time whilst awaiting the retrial. In a sworn statement by Mr Hayes contained in what purports to be part of a Supplementary Record on the appeal which was filed in June 2009, Mr Hayes claims that what he said was not that the plaintiff "would not", but that it would "prefer not" to pay or provide the security over such a long period, but that the plaintiff offered to pay security one week before retrial. Leave to adduce this additional evidence was refused by the Court on appeal; but, in any event, we accept the findings in his Lordship’s reasons supported as they are by his contemporaneous notes of what Mr Hayes said at the hearing in December 2008. Even on 20 May 2009 on which the reasons were published by Goldsbrough J, there had been no offer or undertaking to comply with the order to provide the security ordered on 10 August 2008. After that order was made, there was never any appeal against it, nor any application to vary that order.

Without going further, it seems to us that, on the principles laid down in Birkett v James, Goldsbrough J was entitled to treat this and the other orders for security as peremptory orders, with which the plaintiff intentionally and contumeliously did not comply. It would no doubt be said that the plaintiff lacked the funds necessary to provide the security as and when required. We were informed that the directors of the plaintiff have mortgaged their family homes to raise finance for this venture and the subsequent litigation; but, if sympathy for the plight of litigants were the determinant for making judicial decisions, we would no doubt hear some equally heart-rending stories from the defendants’ side. The law and the courts are not concerned with such matters, which ought not to have been ventilated in argument on this hearing.

The general law principles in Birkett v James with respect to dismissal for want of prosecution do not stand alone. The Solomon Islands Courts (Civil Procedure) Rules 2007 contain explicit provisions on the subject. Rule 9.13 provides that a defendant in a proceeding may apply to the court for an order dismissing the proceedings for want of prosecution:

" ... if the claimant:

(a) is required to take a step in the proceeding required by these rules, or to comply with an order of the court, not later than the end of a particular time; and

(b) does not do what is required before the end of that time."

Mr King submitted that the requirement that the plaintiff provide security was not "a step in the proceeding required by" the rules. That may be accepted, but the case is certainly within the ambit of the alternative second limb of Rule 9.13(a), which applies if the plaintiff (claimant) is required "to comply with an order of the court". The order made by the Chief Justice on 11 August 2008 was an order of the Court that specified the particular time (21 days from date) by which it was to be complied with. Security was not provided by the end of that time, from which it followed that the plaintiffs action was liable to be dismissed pursuant to the second limb of Rule 9.13(a) of the Rules. Mr King complained that, in reference to this Rule, Goldsbrough J had spoken of a failure to comply with a court order, whereas Rule 9.13 itself makes no mention of "failure" to comply. But this submission is spurious. His Lordship was not adding a word to the Rule, but simply summarising its effect by abbreviating the substance of what Rule 9.13 itself expresses at length in saying "does not do what is required by the end of that time". Paragraph 2 of the order made on 11 August 2008 expressly states its consequences by providing that the defendant may apply during continuance of the default to have the action struck out, with consequential orders.

Right to Apply for Dismissal

For much the same reason, we are unable to accept Mr King’s contention that non-compliance with the order within time did not confer an automatic right to apply for striking out or dismissal of the action. There must, he claimed, first be an order to comply with that requirement before any right arises to strike out or dismiss for want of prosecution. The order made by the Chief Justice on 11 August 2008 was, however, a single composite order requiring provision of security for costs of a fixed amount within a particular time (21 days), expressly with liberty on default to apply for striking out of the action. In the face of such an order, there is no room for what Mr King called a "two-stage process" before seeking dismissal of the action on default. There is nothing in Rules 9.13 or 9.14 to require or suggest such a course. The same is true of the provisions of Rule 24.57. When under Rule 24.50 security for costs has been ordered, and it is not given, Rule 24.57 specifically provides in language, which is conjunctive, that three consequences will follow:

"(a) the proceeding is stayed as far as things to be done by the claimant are concerned; and

(b) the defendant may apply to have the proceeding dismissed; and

(c) if the defendant makes such an application, the court may order all or part of the proceeding be dismissed or make any other order that justice requires."

There is no occasion under these Rules for any further order to be made on default before the defendant applies to have the proceeding dismissed. The notion that some such additional requirement must first be fulfilled is reached by the plaintiff only by misapplying to the first class of case ("peremptory orders") in Birkett v James the reasoning applicable to the second class ("inordinate and unreasonable delay"). Under the dismissal power conferred by Rule 24.57(b), the order for security for costs, if appropriately expressed, performs the function of the peremptory order spoken of in Birkett v James. To suggest that the claimant is somehow prevented by the new trial order or by the stay under Rule 24.57(a) from performing its obligation to provide security is a misreading of the provisions of that Rule and of the order made on 11 August 2008. In the view of this Court, Ground 12 of the draft appeal notice must fail.

Date for Retrial

There are several other grounds of appeal, notably 6, 7, 10 and 11, that rely on what are said to be errors by Goldsbrough J in the exercise of his discretion in discussing the proceedings. Ground 6 complains about his Lordship’s treating it as a matter relevant to the dismissal order that the hearing of the new trial had been fixed for five weeks beginning on 10 November 2008 before the matter was (as claimed by the plaintiff) ready for hearing. The date for the rehearing was in fact fixed by the Chief Justice himself in para 4 of his order of 11 August 2008 at a hearing at which the plaintiff was represented. No appeal was instituted against that order, nor was any application made to vacate or vary the date for rehearing. The order that any additional sworn statements to be relied on by either party were to be filed and served by 31 October 2008 was simply ignored by the plaintiff.

Equally, the complaint in Ground 7 and Ground 10 that the plaintiff required further time to consider its position and to prepare for the new trial hearing was evidently not advanced at the hearing that led to the order made on 10 August 2008; or, if it was, it was not relied on to pursue an appeal against that order or to seek a variation of it. There are references in some of the plaintiffs recent material to investigations being carried out by the plaintiff or its advisers in anticipation of the hearing at the new trial, but particulars are not given to show that it required so much time to complete it. After all, the Court of Appeal’s decision in March 2008 allowing the appeal turned ultimately on the credibility of Mr Gibbs. It could scarcely (one might hope) require many months to prepare his testimony for retrial when he and the other evidence for the plaintiff had already been prepared and adduced at the first trial in August and September 2005.

There is another, and we suspect, not unrelated complaint in Ground 9, which is that Goldsbrough J had not paid sufficient regard to the direction of the Court of Appeal that the action should be retried. It is difficult to believe that the learned Judge could or would have overlooked that part of the order of the Court of Appeal; but Ground 9 may be attempting to suggest that, once a new trial has been ordered by the Court of Appeal, it is not within the authority or jurisdiction of a primary judge to dismiss the proceedings for want of prosecution. If that is what underlies Ground 9, then it is plainly mistaken. While it is true that, as was said in Roe v Naylor Ltd supra, a new trial supersedes the first trial, it does not follow that an order for retrial by itself operates to displace the ordinary Rules of Court in Civil Proceedings or to overtake the practice governing such proceedings. Hence, for example, where the party who obtained an order for a new trial fails to proceed with it, the remedy is by application to dismiss made to a single judge of the High Court, and not to the Court of Appeal, which in general has no original jurisdiction to dismiss the action for want of prosecution: see Robarts v French (1895) 72 L T 147, where the Court of Appeal rejected the submission that an order for dismissal was an interference with the Court of Appeal’s order for a new trial. The same conclusion would apply in Solomon Islands in the case of an application under Rule 9.13 or Rule 24.57(a). On this aspect, Ground 9 in the draft is plainly not supportable.

The other two grounds of appeal in the draft notice are contained in paragraphs 8 and 11 of the draft. The former challenges his Lordship’s observation that the plaintiff had taken "complete control" of "how and when the High Court heard that appeal". The quoted passage is taken verbatim from the reasons of Goldsbrough J below. Given that the primary appeal had already been heard and allowed on 12 March 2008, it is self-evident that word "appeal" has been used in mistake for the expression "retrial" or "new trial", as anyone reading the passage would recognise.

Paragraph 11 of the draft appeal notice asserts that the court erred in finding that the plaintiff had a history of non-compliance with orders for giving security for costs. This seems to us to be a fair summary of the plaintiffs record in this matter. As has been said more than once, the first such order was that of the Registrar made on 4 August 2004, which was not finally complied with until 8 December 2008. It required provision of security in the further sum of S8$200,000, the guarantee for which had been, it may be inadvertently, cancelled. The third such order was para 4 of the order dated 10 November 2008 stipulating for the provision by 26 November 2008 of the missing $200,000. As has been mentioned, it was not provided until 8 December 2008. The second order of this kind was the order of the Chief Justice dated 8 August 2008 that within 21 days of the date of order the plaintiff provide security in the sum of $1,216,037.31 for the costs of the retrial that was to be conducted. It was not provided, as required, on 2 September 2008 and, as far as the appeal record goes, it has still not been provided. It is far from being an excuse to say that the plaintiff did not wish to pay it more than a week before the trial, leaving the defendants in the meantime to incur costs for which they had no security before trial and would not know whether or not any would be provided until seven days before retrial. Finally, there is the matter of the defendants’ costs of the appeal, which was allowed by the Court of Appeal on 12 March 2008, to be paid by the plaintiff within one month. These costs have now been assessed by Goldsbrough J in his reasons of 20 May 2009 at a sum of SB$360,285. They have not been paid.

It is correct to say that, in a number of ways, and on various occasions, the plaintiff has shown a disdain for orders of the High Court of Solomon Islands and of this Court of Appeal, requiring it to pay or secure costs; and that it has treated the performance of those orders as if (as the Judge said) they were merely optional. The fact that the plaintiff has often done so in the past does not instil confidence that, if now allowed to proceed to the rehearing, it will amend its ways and provide the security that has been ordered. For such conduct, dismissal of the proceedings is the remedy that is explicitly pointed out in Rule 9.3 and Rule 24.57(b). We agree with his Lordship’s decision in this matter. The appeal from Goldsbrough J is dismissed with costs.

Postscript to Reasons

In this appeal, submissions to the Court of Appeal from both sides of the record were completed in the afternoon of Wednesday 24th July 2009. The appeal was then reserved to be considered and for the giving of judgment. At that stage the order made by the Chief Justice on 11 August 2008 had not, even belatedly, been complied with. That order required security for costs of the new trial that was ordered by the Court in March 2008 to be provided in the sum of $1,216,037.31 within 21 days; that is by 2 September 2008.

On 31 July 2009, which was a week after the sittings of the Court of Appeal had come to an end, a statement sworn by the second appellant R.H. Gibbs was filed in this appeal. It recorded that security in the amount ordered had now been delivered to the Registry. A copy of the security, in the form of a bank guarantee, is dated 27 July 2008. The sworn statement was accompanied by a letter from the plaintiffs Sydney solicitors addressed to the Chief Justice asking that copies of the letter be distributed to the other Judges of Appeal. There is no assurance that the defendants or their solicitors Sol-Law have been alerted to these new developments, as of course they should have been before they were carried into effect.

Presumably, the Court is being encouraged to admit these communications as evidence that the plaintiff and Mr Gibbs have now provided the amount of security ordered on 11 August 2008. For the following reasons we are not persuaded that it would be correct to adopt that course:

- The security for costs has been provided some 9 or 10 months after it was ordered and due, thus supplying further proof that the plaintiff is determined to comply with orders of court only at times of its own choosing.

- Security not having been given as ordered, the proceeding has under Rule 24.57(a) been stayed as far as things to be done by the plaintiff claimant are concerned, which includes the provision of security.

- The sworn statement that the security has now been provided is fresh evidence that the Court has not been asked or agreed to admit. Despite the stay imposed on 11 August 2008, the plaintiff was permitted on 5 December to oppose the application for dismissal. This concession has never extended to the tender of further evidence after the appeal had been heard and reserved.

- If that further evidence were now to be admitted, it would provide this Court with additional material not previously before the primary judge, on which the Court of Appeal would be exercising an original discretion different from the material on which the primary judge in fact exercised his discretion in the first place.

- As with other appeals, the question to be determined on this appeal is whether or not on the material before him the primary judge erred in the exercise of his discretion. We consider that he did not do so.

We confirm our decision that the appeal is dismissed with costs.

SIR ALBERT PALMER CHIEF JUSTICE
MCPHERSON JA
WILLIAM JA