Hashimoto v Sullivan [1996] SBHC 58; HC-CC 110 of 1993 (28 October 1996)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 110 of 1993

TOSHIO HASHIMOTO AND DAVID HAYWARD

-v-

JOHN SULLIVAN AND ROBERT VICTOR EMERY

Beforech, J

Hearing: 28 October 1996 - Judgment: 28 October 1996

Counsel: A Radclyffe for the plaintiffs; J Sullivan or the defendants

INng>INTERLOCUTORY JUDGMENT

The Court has before it two applications. The history of this case and related cases between these parties show that interlocutory applications in them tend to take greater attention than the substantive cases. Further, every such interlocutory application by one party seems to be promptly met with by interlocutory application from the other party. The first application, dated 26/7/96, filed on 31/7/96 is by the defendants, John Sullivan and Robert Victor Emery, joint administrators of the estate of Sunny Wun San Tong. They seek order of court to withdraw part of money injuncted in this case, No. CC110/93, Toshio Hashimoto and David Hayward -v- John Sullivan and Robert Emery. The sums they seek to withdraw are judgment and costs sums which they have obtained in Civil Appeal Case No. 3 of 1995, Emery and Another -v- Hashimoto and Another. That appeal was from a judgment of the High Court following joint trial of civil cases, No. CC301/93 Emery, Sullivan and Taisol Investment Corporation (SI) Limited -v- Hashimoto and Hayward, and No. CC119/93 Emery and Sullivan -v- Hashimoto and Hayward. The money injuncted in this case is the proceeds of sale by authority of court order made on 17/5/93. It was ordered to be banked by the defendants to await the final determination of this case. The second application dated 1/10/1996, filed on the same day is by the plaintiffs, Toshio Hashimoto, the first plaintiff and David Hayward, the second plaintiff. The application seeks order that the action now be set down for hearing, further directions as the court deems fit, and that costs of the application be reserved.

Not much was said in court about why it was necessary to make the second application. The reasons for the application remains unclear. On record, Palmer, J. made extensive direction order on 13/9/1993. If all the paragraphs therein have been complied with, it will now remain for the plaintiffs simply to present two bundles of pleadings and apply to the registrar for date of hearing -see Order 38 rule 3. Paragraph 8 of that order directed that the action be review in chambers on 7/4/1994. I have not been informed whether that took place. For the reasons above I would dismiss the application with costs as being unnecessary and leave the plaintiffs to proceed to apply for date in the normal course, especially in view of the fact that it is now 2 years and over 5 months since the date directed for review. Defendants have not taken issue on that and because there have been interlocutories which have crowded the path of pleadings, I have decided not to dismiss the application. Order for direction is made, directing that the plaintiffs prepare bundles of pleadings, file two at court and serve a copy on the defendants within 30 days. At the time of filing the bundles, the plaintiffs are to apply to the registrar for date of hearing. Should the plaintiffs fail, the defendants may proceed under Order 38 r 2 within 30 days. If both parties fail the registrar is to list the action after 12 months from the date of this judgment, for striking out.

Relevant to the first application are these: The defendants/the applicants hold in bank account a sum of money now on the date of hearing of this application, said to be US$636,000. The money is being held by order of Court in this case CC 110/93 made on 17/5/93. It is the proceeds of sale of certain shares that the defendants as administrators held in Cape Esperance Company Limited. The plaintiffs had earlier before the sale, brought this action claiming that the shares were held in trust by the administrators for the plaintiffs, because the deceased, they claimed, had held the shares in trust for the plaintiffs. They claimed that they were the beneficiaries of the shares. In the course of proceedings, the defendants applied to court to have the shares sold. That application was opposed by the plaintiffs. Court granted the application in an order made on 17/5/93, and the shares were sold. The proceeds were injuncted to be held by the applicants/administrator/defendants, except that US$96,875 was to be paid to Sagalu Exim, and expenses were to be deducted. The position in the case is now therefore, that if the plaintiffs succeed in proving that they were the beneficial owners of the shares, they will now not receive transfer of the shares, but the proceeds injuncted and may be damages. If they lose, of course the injunction will be lifted and the administrators will apply the proceeds to the estate of Tong.

In two cases No. CC301/93 and No. CC 119/93 tried together, and ended as Civil Appeal No.3 of 1993 (Emery and Another -v- Hashimoto and Another, the administrators have obtained judgment, for breach of fiduciary duty, in the sum of US$175,000 plus costs. They have now applied to court to order release of that sum and sum for costs from the proceeds of the sale of the shares, which proceeds they now hold, but injuncted. The judgment they seek to execute upon is judgment of the Court of Appeal and so there is not going to be change in the order that the sum of US$175,000 is a judgment debt against the plaintiffs, together with costs, in favour of the administrators, the defendants in this case.

The plaintiffs/respondents oppose the application for the release of part of the proceeds injuncted so as to satisfy the judgment debt. Their grounds are that the judgment creditors is Taisol Investment Corporation (SI) Limited - (Taisol), not the defendants/applicants, the method being pursued to recover the judgment debt is "unorthodox" and that the 'respondents are now seeking injunction to restrain the administrators from disposing of the estate of Tong anyway.

The first submission of the respondents that the judgment creditor is Taisol is true to a little extent, but it ignores the explanation given by Williams J A who wrote the judgment of the Court of Appeal. Williams J A stated that the administrators have the benefit of any judgment that Taisol recovers - see page 25, third paragraph which states:

"Given the express terms of the Deed, and bearing in mind that where an equitable assignment is involved any action must be brought in the name of the assignor, the principal claim here must be of Taisol. It is the appropriate plaintiff but the administrators have the benefit of any judgment it recovers."

It follows that the administrators are entitled to collect on the judgment or to enforce it. They are entitled to bring this application.

The second submission of the plaintiffs that the method used is unorthodox is baseless. Learned counsel for the plaintiffs, Mr Radclyffe did not point out any provisions in the Rules or in case law in support. It must not be forgotten that the starting point in recovering money ordered in a judgment is the provision in Order 45 r 1. It is not even necessary for the judgment debtor to make demand. All that is required is service of the judgment or order on the judgment debtor. In this case the judgment debtor was represented all through to noting judgment, there is no need to serve, and he should by now have paid off the judgment debt. Execution by authority of a writ of execution is a result of failure to meet an order of court voluntarily. It is an enforcement. I set out here Order 45 rule 3 upon which I base my reasoning that execution is a result of failure to comply with court order. The Order states:

"3. A judgment for the recovery by or payment to any person of money may be enforced by attachment and sale of property of the party against whom judgment was given or the decree made or by his imprisonment or both."

It is in affidavits in this case and in earlier interlocutory judgments that Mr Hashimoto does not reside within this jurisdiction and does not have assets in the jurisdiction. In this application he has not appeared in person so it seems he maintains presence in the jurisdiction for purposes of litigating only through solicitors. In that way, it seems he would, if he so wishes, avoid the operation of Order 45 r 3 whereby his assets would be sold or he would be imprisoned. The judgment that the applicants/defendants rely on is a judgment of the Court of Appeal and that is final in that case. It is opened to the applicants to base application for imprisonment of Mr. Hashimoto on it if he were physically present within the jurisdiction and refuses to pay. Justice Palmer was alert to difficulties that may arise regarding a litigant who keeps all his assets out of the court's jurisdiction, and also physically keeps away from the jurisdiction. Justice Palmer ordered undertaking and security for costs in the form of bank guarantee or cash when he ordered the injunction restraining the defendants from disbursing the- proceeds of the sale of the shares, the injunction that - the applicants now seek to have lifted in part. Hashimoto has provided that bank guarantee, but has since taken nearly 2 1/2 years to take the next step necessary in his action in this case. Steps could have been taken to have it dismissed for non-action. Given the above facts it is open to the applicants to take step to have the judgment which is for their benefit, satisfied by the only known possible asset of Hashimoto within the jurisdiction, the money that the defendants hold under court order. I say possible asset because that money will only belong to the plaintiffs if they win this case. If they lose the case, the money will belong to the applicants. By the court granting the applicant the order to satisfy the judgment debt that the defendants have against the plaintiffs now, the court will do no harm whatsoever to the plaintiffs/respondents. Should they win the present case, they will not have a judgment debt hanging over their heads waiting to be paid thereby diminishing judgment sum by the sums applied for now. Should they lose, they will have to top up the proceeds by the sum the applicants now seek to withdraw. In both instances the plaintiffs respondents will have to pay the judgment sums now sought to be recovered.

Submission by counsel for the respondents that the respondents are now seeking injunction against the applicants not to dispose of the estate to which they are administrators is no ground for refusing this application. At this stage the applicants/administrators are liquidating the estate. The stage will come when they will have to file distribution account. Objections may arise at that stage and will all be considered. It is only after objections, if any, have been dealt with that the court will authorise distribution of the estate. If the plaintiffs are kin on proceeding with this case, the case will have been determined finally by that time. It all depends on the plaintiffs/respondents.

The two cases cited by Mr Sullivan namely, Hill (Administrix) -v- Ziymack (1906) 7CLR 352 and Ferdinand Wagner (A Firm) -v- Laubscher Bros and Co (A Firm] (1970) 2QB313 are right on the issue in this application. I allow the application and order that the applicants/administrators of the estate of Tong are authorised to withdraw from the proceeds of the sale of shares of Cape Esperance Company Limited, which proceeds are now held by the applicants by order of court made on 17/5/93, the sum of US$175,000, being the judgment sum ordered in Civil Appeal Case No. 3 of 1995 (Emery and Another -v- Hashimoto and Another), and further sum representing agreed or taxed costs of appeal. It is also ordered that they may withdraw from the proceeds agreed or taxed costs of this application.

Delivered this this Monday the 28th day of October 1996

At the High Court Honiara.

Sam Lungole-Awich
Judge