Roni v Ross Mining (Solomon Islands) Ltd [1997] SBHC 71; HC-CC 060 of 1997 (4 September 1997)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 60 of 1997

WILLIE RONI AND ANOTHER

-V-

ROSS MINING (SOLOMON ISLANDS) LIMITED AND OTHERS

High Court of Solomon Islands
(Palmer J.)

Hearing: 7th August, 1997
Ruling: 4th September, 1997

C. Ashley for the First and Second Applicants
R. Gyles Q.C. and A. Radclyffe for the First and Second Respondents
B. Titiulu for the Third Respondent
J. Katahanas for the Fourth Respondent

PALMER J.: The First and Second Applicants apply by summons filed on 28th July, 1997 pursuant to Order 21 Rule 29 of the High Court (Civil Procedure) Rules, 1964, for orders inter alia:

"That paragraph 55 of the Defence of the First and Second Respondents be struck out on the grounds that:

(a) it does not disclose any defence as a matter of fact or law; and

(b) it is unnecessary and scandalous and will prejudice, embarrass or delay the fair trial of the action."

Paragraph 55 of the Defence of the First and Second Respondents read as follows:

"Further, or alternatively, the First and Second Respondents say that the First and Second Applicants are not entitled to the relief claimed in the Statement of Claim, or any relief, because they come to this Honourable Court with unclean hands."

The first ground raised that this does not disclose any defence as a matter of fact or law in my respectful view must be dismissed. In the book titled "The Principles of Equity" by Patrick Parkinson, at page 966, paragraph 2932, the learned Author stated:

"The equitable concept of "unclean hands" has a somewhat uncertain relationship to the defence of illegality. It flows from the maxims, "a person who comes to equity must come with clean hands" and "no court of equity will aid a man to derive advantage from his own wrong". However, although the concept is arguably wider than the defence of illegality, it may be that it cannot be invoked in situations in which the illegality defence can be.

. . . To establish the defence of unclean hands a defendant must point to some type of impropriety on the part of the plaintiff which is "depravity in a legal as well as in a moral sense" and bears an immediate and necessary relation to the equity sought. The defence is a discretionary one, and in applying it the court must take into account all the circumstances of the case."

Also in the book titled "The Principles of Equitable Remedies - Specific Performance, Injunctions, Rectification and Equitable Damages" by I. C. F. Spry, fourth edition, at page 242, the learned Author states:

"The maxim that a plaintiff in equity must approach the court with clean hands and that he who seeks equity must do equity are often used in a purely rhetorical manner in cases where the refusal of relief may better be justified on more precise grounds. Thus many cases where the absence of clean hands is referred to may be explained by the presence of fraud, or misrepresentation, or an illegality, or a breach of contract leading to a lack of readiness or willingness on the part of the plaintiff to perform his obligations.

. . . Nonetheless there are cases that are not readily explicable on any of the more limited grounds that have already been considered here, where nonetheless the plaintiff is denied specific performance according to the settled practice of courts of equity. It may be said of these cases that they fall into two main categories. In the first category, the plaintiff is shown to have materially misled the court or to have abused its process, or to have attempted to do so. In the second category are cases where the grant of the relief that the plaintiff seeks would enable him to achieve a dishonest purpose and where in all the circumstances it appears to the court to be inequitable to grant the particular relief in question. These cases may indeed be said to depend ultimately on a general principle that is directed against unconscionable conduct or the absence of clean hands. But whilst this general principle is susceptible of fresh applications in appropriate circumstances, care should be taken not to extend it to cases where, by implication, it has already been held not to apply."

I am satisfied the defence of unclean hands is a defence in equity which can be raised in certain specified circumstances which would require the court to exercise its discretion whether to grant the relief sought by the plaintiff (Applicants in this case) or not; in particular where the injunctory relief is sought.

Three grounds have been specifically pleaded in support of the defence of unclean hands, namely, (a) abuse of process, (b) interfering with the First and Second Respondents’ contractual and business relations and (c) interfering by unlawful means. The Applicants have focused their attack on grounds (a) and (b) only.

Under ground (a), a number of letters are pleaded which the First and Second Respondents argue support their claim of abuse of process. These included the letters dated 10th March, 1997 and 7th April, 1997. In their response to the Applicant’s requests for Further and Better Particulars, dated 23 July, 1997, the Respondents stated:

"The letter from Slater and Gordon to the Managing Director of Ross Mining NL dated 10 March 1997 constitutes an abuse of process because it discloses that the purpose of these proceedings is to use the proceedings as a means of obtaining some advantage beyond what the law offers."

In argument before this Court, Mr Gyles submits that whilst the Applicants give the impression in their letter of the 10th March, 1997 that they do not wish to stop the development of the Gold Ridge Mine, the action when filed in this Court, showed otherwise; that they were bent on having the operation stopped and the Respondents to pack up and leave; indicating perhaps some ulterior purpose behind their actions. This Mr Gyles submits, at least raises an arguable case against the Applicants as to the propriety of this action. Other correspondences have been referred to which it is argued when considered in context would show an arguable case that some ulterior purpose was behind the actions of the Applicants. He argues that these would be canvassed in detail at the trial proper. For the purposes of this application, he submits that sufficient material facts had been pleaded.

The objection taken by the Applicants against the ground of abuse of process is that they do not know what the collateral advantage beyond what the law offers which the Respondents seek to allege motivates the Applicants. They argue that the Respondents have provided only the circuitous pleadings which in sum allege that there has been abuse of process because the letters are an abuse of process. Also that the pleadings must establish on its face that such collateral purpose is the dominant purpose of the proceeding.

The issue for me to consider therefore is whether sufficient material facts had been pleaded which disclose adequately what the collateral and predominant purpose which the Respondent alleges motivated the Applicants, and thereby amounted to an abuse of process. In his submissions before this Court, Mr Gyles sought to submit that the letters referred to, portray a sufficiently arguable case to the Court (which will be canvassed in detail at trial), that the collateral purpose sought by the Applicants was not so much the question of reasonableness of the compensation, as the stoppage of the mining operations and the removal of the Respondents from the mining site, with the view perhaps of having other mining companies more sympathetic to the wishes of the Applicants brought into the country. When these issues are canvassed at trial, the Court should be able to exercise its discretion whether to grant the relief sought or not.

I am satisfied on the material before me, that sufficient facts had been pleaded which adequately disclose an arguable case for the trial court, bearing in mind that the powers of this court to strike out pleadings should be exercised with great care and only in very clear cases. For purposes of this application, it is sufficient that there is evidence in support of the ground of abuse of process and as put by McMillan J. in Packhard and Others v. Transport Trading and Agency Co. Ltd. and Weir [1912] WALawRp 44; (1912) 14 WALR 191, 195, there must be something to argue:

"I think, therefore, it is enough to say that in this case there is something to argue which has not yet been fully argued. . . . I wish it to be clearly understood that I am expressing no opinion at all as to the merits of this defence; I only say that that question may have to be determined later on by this Court with a fuller knowledge of the facts and a more adequate consideration of the law. . . ." (per judgment of McMillan J.)

The second attack of the Applicants is made against ground (b) of the particulars where the Respondents allege that there had been interference with the Respondents’ contractual and business relations. Again a number of correspondences have been relied on by the Respondents in support of this ground.

The first objection raised by the Applicants is that wrongful interference is a tort, not a defence and therefore inappropriately pleaded. With respect however, this overlooks the context in which that allegation was raised; that of unclean hands, and to be considered in the light of the Court’s discretionary power to grant or refuse the relief sought.

The second objection raised is that the Respondents must establish that a duty was owed by the Applicants to the Respondents not to interfere. With respect, I fail to see how this pleading is inadequate or ambiguous in anyway, when it states very clearly and the Applicants fully aware, that the Respondents are alleging that a duty is owed not to interfere. To seek to establish that a duty exists in this application is jumping the gun so to speak, because it is a matter of evidence and submission on the law at the trial proper. It is a matter quite properly left for trial later. It is sufficient that the Applicants are aware what the Respondents are alleging against them.

It has been well established by clear authorities, that the powers of the Court to strike out pleadings, whether inherent or under Order 21 Rule 29 of the High Court (Civil Procedure) Rules, 1964 are to be sparingly used. In General Steel Industry Inc v. Commissioner for Railways [1964] HCA 69; (1964) 112 CLR 125, 129-130 his Lordship, Barwick C.J. made the following pertinent comments:

". . . the jurisdiction to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion.

. . . It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal is clearly demonstrated. The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them (the pleadings) to stand would involve useless expense".

At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or ‘so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument’; ‘so to speak apparent at a glance’."

His Lordship continues at page 130 as follows:

". . . in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff’s claim. Argument perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed."

The grounds raised in support of the defence of unclean hands in my respectful view cannot be said to be so clearly untenable that it cannot possibly succeed. As pointed out by McMillan J. in Packhard and Others (ibid), as long as there is something to argue, that should be sufficient not to order the pleadings to be struck out. (See also Dey v. Victoria Railways Commissioners (1949) 78 C.L.R. 62 per judgment of Dixon J. quoted by Barwick C.J. in General Steel Industries Inc. (ibid):

"But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process."

I am satisfied there is a real question to be determined by this Court on which the rights of the parties depend upon and that in the circumstances the pleadings should not be struck out.

Also see Lawrence v. Lord Norreys 15 App. Cas. 210 in which Lord Herschell stated:

"It is a jurisdiction which ought to be very sparingly exercised, and only in very exceptional cases. I do not think its exercise would be justified merely because the story told in the pleadings was highly improbable, and one which it was difficult to believe could be proved."

In Drummond-Jackson v. British Medical Association and Others [1970] 1 WLR 688, 690, per judgment of Lord Pearson, commenting on the Rules of the Supreme Court, Order 18 Rule 19 (1)(a), which is similar to our O.21 R. 29, states that it had been established by many authorities that the power to strike out any statement of claim as disclosing no reasonable cause of action is a summary power which should be exercised only in plain and obvious cases. This in my respectful view must also include defence pleadings challenged in this case. The same standard should be applied in the context of pleadings sought to be struck out. Unless there is a plain and obvious case, that the defence pleaded cannot succeed or is certain to fail, the Respondents should not be "driven from the judgment seat" (to use the term coined by Salmon L.J. in Nagle v. Feilden [1966] 2 Q.B. 633 at 651), at this stage of the proceedings. The question to ask as put by Lord Pearson in the above case and varied to suit the circumstances of this application is, do the pleadings disclose a defence which has some chance of success? If the answer is yes, and I am more than satisfied that that is the position in this case, the pleadings should not be struck out. I am satisfied the orders sought in the summons filed on 28th July, 1997, must be dismissed with costs.

ORDERS OF THE COURT:

1. Dismiss application filed on 28th July, 1997 seeking order that paragraph 55 of the Defence of the First and Second Respondents be struck out pursuant to Order 21 Rule 29.
   

2. Costs of this application to be borne by the Applicants.

THE COURT.