Solomon Security Service Ltd v AIPF (SI) Ltd [2022] SBCA 25; SICOA-CAC 30 of 2020 (18 November 2022)

IN THE SOLOMON ISLANDS COURT OF APPEAL

Case name:	Solomon Security Service Ltd v AIPF (SI) Ltd
Citation:
Decision date:	18 November 2022
Nature of Jurisdiction	Appeal from Judgment of The High Court of Solomon Islands (Faukona; DCJ)
Court File Number(s):	30 of 2022
Parties:	Solomon Security Service :Limited and Leslie Taloma’ae v AIPF (SI) Limited
Hearing date(s):	27 October 2022
Place of delivery:
Judge(s):	Hansen, VP, Palmer, CJ Lunabek, JA
Representation:	D Marahare for the Appellant N. Laurere for the Respondent
Catchwords:	Solomon Islands Court (Civil Procedure) Rules 2007, Rule 23, “unless Orders”
Words and phrases:
Legislation cited:	Solomon Islands Court (Civil Procedure) Rule 2007, r 9.8 (a) and (b), r 23 (4) , r 9, r 23.2, r 23.4,
Cases cited:
ExTempore/Reserved:	Reserved
Allowed/Dismissed:	Dismissed
Pages:	1-7

JUDGMENT OF THE COURT

1. We note that Mr Marahare, now representing the appellants, did not appear in the Court below.

Background

2. The proceedings were commenced in 2018. The respondent was a company offering consultancy services for businesses. The appellants consulted the respondent, seeking advice about expanding their business, and eventually written agreements were entered into. The respondent alleges in the statement of case that sums due for the consultation, and pursuant to the written agreement, were not paid.
3. The appellants were dilatory in complying with Court orders to file sworn statements. Ultimately the Judge made “an unless order” that was not complied with. It is noted that the “unless order” was made when the appellants’ then counsel failed to attend.
4. On 19 November 2020 the matter came before Deputy Chief Justice Faukona, when all parties were represented. He was satisfied that the appellants had failed to file and serve their sworn statement in support of their defence as ordered, and he made the following orders:
   1. The first and second defendants’ defence is struck out and judgment is entered in favour of the claimant.
   2. Judgment in the sum of 2,539,461.96 against the first and second defendants.
   3. An interest thereon pursuant to rule 9.8(a) and (b) of the Solomon Islands Court (Civil Procedure) Rules 2007.
   4. Costs of and incidental to the action on an indemnity basis.
   5. The matter is adjourned to 11 February 2021 at 9.30am for further mention.
5. That order was sealed.

The appeal

6. The hearing proceeded on the basis of an amended notice of appeal filed on 26 June 2022.
7. The first two grounds arise because of an allegation the “unless order” of 12 November 2020 was not served. The third ground alleges that in the context of Rule 23(4) there was no evidence of any deliberate or sustained failure on the part of the appellants to comply with the “unless order”. The fourth ground is an allegation that the Judge was wrong to find non-compliance with the “unless order” that warranted striking out the appellants’ defence, when he had refused summary judgment against the respondents based on their defence having no merit. The fifth ground was said to be a failure of the Judge to consider the enforceability or otherwise of the written agreement when there was said to be a breach of the Stamp Duties Act on the part of the respondent. The sixth ground was that the Judge erred when he failed to consider the appropriateness of the causes of action in the claim as well as the manner in which they were pleaded. Finally, the seventh ground was the granting of interest under Rule 9, which should not have been done as the matters were said to be irrelevant.

The respondent’s application

8. On 8 September 2022 the respondent filed an application seeking leave to adduce further evidence. Essentially this was to supply the Court with evidence of the service of the “unless order” by placement in the cubby hole at the Court of the former solicitor for the appellants, and also by service on the registered office of the first appellant.
9. This was opposed by the appellants on the grounds that it was filed too late; a somewhat surprising submission given the repeated failure of the appellants to comply with Court orders.
10. This Court directed that this matter would be heard along with the substantive appeal. We heard submissions and advised counsel that the respondent’s application to adduce this new evidence would be granted.
11. We now give our reasons for that. First, it was not filed too late in the context of this case. Secondly, it showed beyond peradventure, that the “unless order” had been served as required. Thirdly, these were matters that counsel now appearing should have checked and ascertained before filing the Amended Notice of Appeal. The grounds of appeal relating to service should never have appeared.
12. As a consequence of our ruling Mr Marahare responsibly accepted that grounds one, two, four, and seven would be withdrawn.

Submissions

13. The appellants submitted pursuant to ground three that the matter was governed by Rule 23.2, which states:

23.2 A party who is entitled to the benefit of the order may require the noncomplying party to show cause why an order should not be made against him or her under rule 23.4.

14. He went on to say that in those circumstances the respondent needed to comply with the provisions of Rule 23.3 and follow the steps set out in that rule. He submitted that this had not occurred and referred to authorities regarding the right to a fair trial.
15. In relation to ground five he submitted that the respondent was not entitled to rely on the written agreement because at the relevant time it remained unstamped.
16. In relation to ground six, it was submitted that the agreement relied on need not take any special form as long as the essential ingredients are present, including the “meeting of minds”. He referred to the sworn statement of the second appellant, saying he had not accepted an offer of a loan from the Bank of South Pacific. He said this was irrelevant because this was based on previous stages and milestones that were a prerequisite for any such application. He also pointed out that, while in their defence the appellants denied entering into an agreement, in the sworn statement it accepted signing both documents containing the parties’ rights and obligations. Those documents were the original instructions and the consideration agreed to be paid for the job.

Discussion

17. Quite clearly, this “unless order” was properly served. The relevant documentation was properly stamped. That is made clear by the Sworn Statement of Mr Hou.
18. In relation to the other grounds of appeal remaining before us, they can be readily disposed of. With respect, Mr Marahare misunderstands the rules and the nature of an “unless order.” What was clear in this case was that the appellants were serial offenders in failing to comply with Court orders relating to the filing of the necessary documents. Mr Laurere, in his submissions, said this occurred on at least eight occasions. A perusal of the file confirms that submission.
19. It is unsurprising that against that background (and in the circumstances of counsel for the appellants failing to appear, with no explanation ever being given) that the Judge made the “unless order.” This order is governed by Rule 23.4 of the rules, which reads:

23.4 In cases of deliberate or sustained failure the court may make any one or more of the following orders including an order that is self-executing in the event of non-compliance within a specified time:

• (a) strike out the pleadings of the non-complying party;
• (b) extend the time for complying with the order;
• (c) give directions;
• (d) make another order.

20. The entry of judgment is as a consequence of the failure of the appellants to comply with an “unless order” and the consequential orders made by the Judge on 19 November 2020. As a consequence, he was entitled to strike out the defence and enter judgment in favour of the respondent. He was also clearly entitled to enter judgment in the sum claimed and to make the provision for interest he did. In the face of the appellants’ contumelious behaviour, it is unsurprising that he awarded costs on an indemnity basis.
21. The entry of judgment in such circumstances is as a result of the failure of the appellants to comply with the rules of Courts and orders made by the Court. It does not provide an occasion to consider the merits of the claim, because effectively, by their failures, the appellants have surrendered their right to do that. The fact that the earlier summary judgment application against the appellants was unsuccessful does not alter that. That was simply a finding that they may have an arguable defence, but as we have just noted, their defaults have had the result that they have lost the opportunity to have the matter considered on its merits.
22. Rule 23(4) could be described as a “disciplinary rule” empowering the court to have wide ranging discretion in making orders against recalcitrant litigants who clog the court system. We consider if an “unless order” is made judges should, wherever possible, make them self-executory as provided for in Rule 23 (4). Such orders are generally expressed in terms, such as: “Unless the defendant “A” files its sworn statements in support of the defence by......... (date) the defence is struck out, and there will be leave to the claimant to enter judgment in the sum of “X Dollars” together with interest and costs.” The judge making the order needs to exercise their discretion as to interest and the level of costs. Although normally the latter would be on an indemnity basis. Such an order means the claimant can have the order perfected and sealed without the necessity of another court hearing.
23. This is an appeal without merit. It is dismissed. There will be costs to the respondent on an indemnity basis, to be taxed if not agreed.

Hansen JA, Vice President
Palmer, CJ
Lunabek, JA