Kalena Timber Company Ltd v Malasa [1993] SBHC 20; HC-CC 121 of 1991 (26 June 1993)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 121 of 1991

KALENA TIMBER CO LTD

-v-

HALL MALASA (Trading As Hall's Construction)

High Court of Solomon Islands
(Muria CJ.)

Hearing: 18 March 1993
Judgment: 26 June 1993

J C Corrin for Plaintiff
T Kama for the Defendant
A Radclyffe for the Claimant in the Interpleader proceedings.

MURIA CJ: On 2 April 1991, judgment in default of appearance was entered for the plaintiff Kalena Timber Company Limited against the defendant Hall Malasa (trading as Hall's Construction). That judgement was for the sum of $24,411.82 together with interest at 5% from the date of judgement and $180.00 fixed costs and filing fee. On 22 April 1991, execution was issued on that judgement. The writ of fi.fa. was renewed in June 1991 for the balance of $22,961.82 together 5% interest and fixed costs of $180.00 and filing fee.

Following the issue of the renewed execution on the balance of the judgement, the Sheriff of the High Court seized a Messey Ferguson tractor MF 240 Reg.No.7393 from the defendant. On 10 November 1992, the Solicitor acting on behalf of Masi Transport (the claimant) sent a notice by way of a letter to the Sheriff objecting to the tractor being seized and claiming that it did not belong to the defendant.

By his affidavit in support of the claim, Terry Sumakana deposed that he was one of the trustees of Masi Transport and the other two trustees were Frank Lekevolomo and Hall Malasa (the defendant). He further deposed that the tractor was purchased by Masi Transport from funds contributed by over 30 members of their Community in Choiseul at $100.00 each. He further stated that the defendant was only acting as a trustee and taking a leading role in obtaining funds from Development Bank of Solomon Islands on loan for the purchase of the tractor. This, it was said, was because the defendant had good standing with the Bank and so it was easier for him to deal with the Bank than the other members of the community concerned.

On those circumstances deposed to by Terry Sumakana, the Sheriff issued these interpleader proceedings, calling on the plaintiff and the claimant, to state the nature and particulars of their respective claims to the seized tractor. The evidence for the claimant was directed to prove that the tractor belonged to Masi Transport while the cross-examination on behalf of the execution creditor was directed at showing that the tractor was the property of the defendant.

The question which the court need only concern itself here is whether the seized tractor the property of the claimant Masi Transport or the defendant. There is no suggestion here that the tractor is a partnership property of the Defendant and Masi Transport.

In so far as the defendant (execution debtor) is concerned, the property seized was in his possession and the Sheriff was therefore entitled to seize it from him. The rules in this regard are clearly aimed at "property in the possession of the judgement debtor." See for example, rules 5 and 6 of Order 46, HC (Civil Procedure) Rules. These interpleader proceedings have been taken out by the Sheriff because the claimant now comes to this court and says that the property seized is theirs and the Sheriff ought not to have seized it. It is therefore necessary that the claimant must show their title to the property or that they have a right to or an interest in the property so that the Sheriff ought not to have taken it for the benefit of the execution creditor. In this regard, it is therefore not essential that the claimant must prove that the property, in this case, the tractor, is theirs absolutely. It is sufficient for the claimant to show that they have a title to or interest in the property: see Peake -v- Carter [1916] 1 K.B 652, 656.

In the case of Green -v- Stevens [1857] EngR 410; (1857) 2 H & N. 146, 147 quoted in Peake -v- Carter (above) on pages 656 and 657, Pollock C.B. put the matter this way:

"The issue in the present case is, not whether the goods were the property of Mary Green absolutely, but whether they were hers as against the defendant. My impression is, that this form of issue has been adopted for the express purpose of enabling any person lawfully entitled to possession to sustain his claim."

and Bramwell B. in that case also asked the question:

"Is not the question whether the claimant has such a title as would enable her to maintain an action against the Sheriff?"

and he put the answer thus:

"In an interpleader issue the plaintiff must make out his title, but he may do so by shewing that he has such a right to the goods that they cannot be taken from him by the execution creditor. In the present case the judge appears to have said that it was not necessary to shew that the goods were absolutely the property of the claimant if they were hers in any sense. I think that this was just a remark, and that if claimant has any sort of title it must be taken that he has a right to defend it until the contrary is shewn. If it is shewn that he has a lawful title to the possession, that is enough."

The facts relied on by the claimant in the present case are stated in the affidavit of one of its trustees, Terry Sumakana. In addition, he deposed that he and the other trustee of the claimant, Silas Malasa, guaranteed the loan which was taken out in the name of Hall Malasa (the execution debtor).

The case for the claimant therefore basically is that the tractor is a community property under Masi Transport which had been registered as a business name. The loan from the Bank to purchase the tractor was organised by and taken out in the name of the defendant (now the execution debtor). That loan was guaranteed by two of the trustees of the claimant. Further the claimant deposed that prior to taking out of the loan in July 1982, the members of the claimant had already organised themselves, discussed and agreed to obtain a tractor. The subsequent loan to purchase the tractor was taken out as a result of the group's initiative.

Looking at the supporting materials exhibited to Sumakana's affidavit, it is obvious that the tractor, although the loan to purchase it was taken out in the name of the defendant, has always been regarded as belonging to the Community who organised themselves under Masi Transport. To facilitate the purchase of the tractor, the defendant and two other guarantors, who are all members of the Masi Transport, arranged for the necessary loan from the Development Bank of Solomon Islands. Apart from the Third Party Insurance Policy issued on 6 July 1982 and the vehicle licence issued on 8 July 1982 which were in the name of the defendant, subsequent licences and Third Party Insurance Policies were issued in the name of the claimant.

When one looks at the documents regarding the use and control of the tractor, it is clear that the tractor had been operating under the Claimant even as far back as August 1982. The hire charges of the tractor were issued under the name of the Claimant, although the contacts were to be made through the defendant or Terry Sumakana both of whom were and still are trustees of the Claimant. The statement of Income and Expenditure for the years 1982 to 1985 in respect of the use of the tractor were all made out under the Claimant's name.

The argument put on behalf of the execution creditor was that the loan to purchase the tractor was in the name of the defendant. The initial Third Party Insurance Policy and the licence were issued in the name of the defendant. As such it must be taken that he is the owner of the tractor.

The underlying basis for the argument on behalf of the execution creditor is that the Claimant must show it has absolute title over the tractor before it can be withdrawn from the sheriff. But as it can be seen from the authorities cited above, it is not incumbent upon the claimant to prove the goods are their absolutely in an interpleader proceeding. It is sufficient if the Claimant show he has a right or interest in the goods that the Sheriff ought not to have seized them for the benefit of the execution creditor. Clearly the Claimant has satisfied that test in the present case.

Interpleader proceedings are issued in order to inform the conscience of the court as to the status of the goods seized: see Carne -v- Brice (18) [1840] EngR 39; 7 M & W. 183, 187 per Parke B. and Plummer -v- Price (1878) 3 LT 657, 658 per Bramwell LJ quoted in Peake -v- Carter (above).

The conscience of the court having now been informed, the court therefore finds that the Claimant has succeeded in establishing its title to the tractor and the Sheriff must withdraw from possession.

Each party to bear its own costs.

(GJB Muria)
CHIEF JUSTICE