National Bank of Solomon Islands Ltd v Waleualo [1998] SBHC 10; HC-CC 247 of 1997 (12 February 1998)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 247 of 1997

NATIONAL BANK OF SOLOMON ISLANDS LTD

v.

WILSON WILIKAI WALEUALO

Before: Lungole-Awich, J

Hearing: 5/2/1998
Ju Judgment: 12/2/1998

Counsel: S Patrick for the plaintiff;
F Waleilia for the defendant

JUDGMENT

(LUNGOLE-AWICH, J): The Application: On 13.10.1997 the plaintiff bank, National Bank of Solomon Islands, by its solicitors, Sol-Law, had writ of summons issued against the defendant, Wilson Wilikai Waleualo. The writ was entitled "SPECIALLY INDORSED WRIT OF SUMMONS", and was in the format of form No. 2 in appendix A of the High Court (Civil Procedure) Rules. It had the usual additional fourth paragraph, calling upon defendant who has entered appearance to deliver defence within 14 days from the last day of the time limited for appearance. It omitted the paragraph in the format about costs, but attached to the writ was a statement of claim in which costs was claimed. The other claims in the statement of claim were for $314,383.13 and interest of $135.36 per day from 26 August 1997. The cause of action was failure by the plaintiff to pay bank loan he obtained from the plaintiff bank.

The defendant, by his solicitors, Bridge Lawyers, entered conditional appearance and has applied to have the writ of summons set aside. The application states that the defendant applies:

"for the following orders:-

1. That the writ of summons be set aside on the ground that it was specially endorsed with a statement of claim for principal plus interest on a loan account.

2. In the alternative, the writ of summons for interest on the loan should have been accompanied by a general endorsement of the writ instead of a specially endorsed statement of claim accompanying the writ. In the premises this action was improperly commenced and ought to be set aside.

3. Further or alternatively that the action herein be stayed.

4. Such further or other orders as this Honourable Court deems meet."

The defendant has not cited any particular rules in any Order in the High Court (Civil Procedure) Rules. The nearest I could find is Order 12 r 17 which in fact deals only with a related matter, setting aside service of writ of summons or of notice of writ of summons upon a defendant. The practice to set aside the writ itself on objection based on irregularity of the writ or on lack of jurisdiction of the court, is a practice 'in the English courts which practice developed alongside O12 r 30 of the English Rules of the Supreme Court, 1883. The words of our O 12 r 17 came originally from the English rule. The 1883 English Rules were replaced by the 1962 Rules of the Supreme Court (Revision) 1962. O 12 r 9 of the latter rules, provides for setting aside writ of summons. The practice of objecting to the writ of summons as well as to the service has been adopted in Solomon Islands. It is worth nothing that under our O 12 r 17 conditional appearance need not be entered when a defendant applies to set aside service of the writ or of notice of the writ.

Submission of thof the Defendant

The defendant's submission to support the application was that the writ was a specially indorsed writ ile under O 3 rr 5 and 6, but that the indorsement on it in t in the Statement of Claim attached, was defective for a specially indorsed writ of summons. The defect, the defendant submitted, was because the sum of $314,383.13 claimed was not, "a debt or liquidated demand". It was not so, the defendant says in written submission,

"because it contains a claim for interest rate and value of which was:

(a) Unascertainable when the indorsement was made, and

(b) unliquidated and unascertainable if and when the defendant desires to make payments."

The defendant's central objection was really that the interest was not shown separately from the principal sum. He contended that because of that, the sum claimed could not form part of special indorsement on specially indorsed writ of summons.

Submission of thof the Plaintiff

The plaintiff's reply in opposition was that the specially indorsed writ of summons was not defective, the sum claimed was definitn if it included interests ests and that if the defendant wanted to know more details he was simply to apply for better particulars. Submission of learned counsel, Mr Patrick for the plaintiff, was simply a reply to the submission of learned counsel, Mr Waleilia for the defendant.

>Decision about Sout Special Indorsement on a Writ of Summons

Mr Waleilia's submission is a very clever thought. A careful reading of O 3 rr 5 and 6, however, in my vshows that the submission iion is based on misconception that claims or reliefs that can be stated in a writ as special indorsement are only debts or liquidated demands. Mr Waleilia's expression was, "debt or liquidated demand only." He picked out for his submission, only one of the claims in O 3 sub-rules 5 (1), (2), (3), (4) and 5 (5), all of which can be used in special indorsement. The claim he picked out was debt or liquidated demand. It is in sub-rule 5 (1). I set out here O 3 rr 5 and 6 for examination:

ORDER 3

5. In actions-

(1) Where the plaintiff seeks to recover a debt or liquidated demand in money payable by the defendant, with or without interest, arising-

(a) upon a contract, express or implied (as, for instance, on a bill of exchange, promissory note or cheque, or other simple contract debt); or

(b) on a bond or contract under seal for payment of a liquidated amount of money; or

(c) on a statute or ordinance where the sum to be recovered is a fixed sum of money or in the nature of a debt other than a penalty; or

(d) on a guarantee, whether under seal or not, where the claim against the principal is in respect of a debt or liquidated demand; or

(e) on a trust; or

(2) Where a landlord seeks to recover possession of land, with or without a claim for rent or mesne profits, against a tenant whose term has expired or has been duly determined by notice to quit, or has become liable to forfeiture for non-payment of rent, or against persons claiming under such tenant; or

(3) Where the plaintiff seeks to recover possession of a specific chattel with or without a claim for the hire thereof or for damages for its detention; or

(4) Where the plaintiff claims possession of any property forming a security for the payment of money; and

(5) In all other actions in the Court (except matrimonial causes, probate and admiralty actions, actions for libel, slander, malicious prosecution, false imprisonment, seduction or breach of promise of marriage, and actions in which fraud is alleged by the plaintiff), the writ of summons may, at the option of the plaintiff, be specially indorsed with or accompanied by a statement of his claim, or of the remedy or relief to which he claims to be entitled. Such special indorsement shall be to the effect of such of the Forms in Appendix A, sections 1 to 4, of Part IV inclusive, as shall be applicable to the case, or in a similar form.

6. (1) Wherever the plaintiff's claim is for a debt or liquidated demand only, the indorsement , beside stating the nature of the claim shall state the amount claimed for debt, or in respect of such demand, and for costs respectively, and shall further state that the defendant can pay the amount claimed and costs:

(a) into court if the plaintiff or one of two or more co-plaintiffs is resident outside the scheduled territories, .............

(b) in all other cases, to the plaintiff, his advocate or agent; and that any such payment must be made within four days after service, or in the case of a writ not for service within the jurisdiction within the time allowed for appearance, and that upon such payment further proceedings will be stayed:

Provided that where the defendant pays the amount into court under this rule he shall give notice of such payment to the plaintiff or his advocate or agent in Form No. 1 A in Appendix A, Part V.

In r 5, the marginal note describes the contents as "special indorsement." Examination of claims enumerated in sub-rules 5 (1) to (5) shows that not all stated therein are just debts or liquidated demands. For example claim for possession of land and chattel are stated in sub-rules 5 (2), (3) and (4). It is only in 5 (1) that debts or liquidated demands are stated. Claims in 5 (5) are even so diverse that it was easier to state exceptions instead. Yet all those claims in 5 (1), (2), (3), (4) and (5) may be specially indorsed on a writ of summons.

Order 3 rule 6 of course deals with only debt or liquidated demand, one of the claims that can be stated in special indorsement. It does not, however, deal with indorsement only, it provides in addition that the amount, the sum, be stated as well as the sum for costs, and further that in that event, the defendant be called upon to pay the sum and costs. Rule 6 really only regulates certain procedures applicable to only one of the claims that are stated in rule 5 that may be included in a writ as special indorsement. The significance of r 6 is that it provides that if the special endorsement is a debt or liquidated demand, the amount should be stated and the defendant be called upon to pay into court or to the plaintiff. The rule does not say that only debt or liquidated demand is a claim to be specially indorsed.

I think it will help in the understanding of the reasons I have given, to state here that I view a special indorsement claim simply as a concise but sufficiently particularised description of the nature and extent of one of the claims enumerated in sub-rule 5 (1) to 5 (5) so that the defendant understands the nature and extent of the claim against him and is in position to plead his defence if any or simply to admit liability and pay up or have damages assessed. That statement in fact has its opposite, namely that a general indorsement claim usually states much less detailed description of the claim so that following it, a detailed statement of claim is filed and served on the defendant before he is required to file his defence. What I have said are merely elaborations of 0 22 rr 1 and 2 which I set out here:

ORDER 22

STATEMENT OF CLAIM

1. The delivery of statements of claim shall be regulated as follows:-

(a) Where the writ is specially indorsed with or accompanied by a statement of claim under Order 3, Rule 5, no further statement of claim shall be delivered unless the court shall otherwise order.

(b) Subject to the provision of Order 13, Rule 9, as to filing a statement of claim when there is no appearance, the plaintiff shall (unless he has delivered a statement of claim under Order 3, Rule 5, or the court otherwise orders) deliver a statement of claim either with the writ of summons, or notice in lieu of writ of summons, or within fourteen days after appearance, provided that the times prescribed by this paragraph may be enlarged by consent in writing or by the Court.

2. Whenever a statement of claim is delivered the plaintiff may therein alter, modify, or extend his claim without any amendment of the indorsement of the writ.

More illustration to the point that specially indorsed claim need not be only debt or liquidated demand is in Order 13 providing for entering judgment for the plaintiff if the defendant fails to file memorandum of appearance, and in Order 29 providing for entering judgment for the plaintiff if the defendant does not deliver his defence to the claim. I set out here only rr3 and 5 of Order 13 and rr2 and 4 of Order 39 which are sufficient illustration to the point:

ORDER 13

3. Where the writ of summons is indorsed for a liquidated demand, wh specially or otherwise, and the defendant fails, ils, or all the defendants, if more than one, fail, to appear thereto, the plaintiff may, subject as provided by Rule 11 of this Order, enter final judgment for any sum not exceeding the sum indorsed on the writ, together with interest at the rate specified (if any), or (if no rate be specified) at the rate of five per cent per annum to the date of judgment and costs in accordance with Form 1 in Appendix F.

4. ......

5. Where the writ is indorsed with a claim for pecuniary damages only, or for detention of goods with or without a claim for pecuniary damages, and the defendant fails, or all the defendants, if more than one, fail, to appear, the plaintiff may enter interlocutory judgement, and the value of the goods and the damages, or the damages only, as the case may be, in respect of the causes of action disclosed by the indorsement on the writ of summons shall be determined by a Judge in Chambers. But the Court may order a statement of claim or particulars to be filed before any assessment of damages, and may ascertain in any other way which the court may direct. (See Forms 2 & 3 Appendix F).

ORDER 29

2. If the plaintiff's claim be only for a debt or liquidated demand, and the defendant does not, within the time allowed for that purpose, deliver a defence, subject as provided by Rule 13 of this Order, the plaintiff may, at the expiration of such time, enter final judgment for the amount claimed, with costs. (See Forms 1 & 4, Appendix F).

3....

4. If the plaintiff's claim be for unliquidated damages only, or for detention of goods with or without a claim for unliquidated damages, and the defendant, or all the defendants, if more than one, make default as mentioned in rule 2 of this order, the plaintiff may enter an interlocutory judgment against the defendant or defendants, and the value of the goods, and the damages, or the damages only, as the case may be, shall be determined by the court.

I think that from the above illustrations it should be apparent that the more important purpose of categorising a claim as debt or liquidated demand in contrast to others is for the consequence that upon default in entering appearance or defence, a final judgment upon which execution may be levied straight away may be obtained by the plaintiff.

>Interest

>

Mr Waleilia's submission about the interest charged in this case not being easily ascertainaeed not be considered for the purpose of deciding this case because from the reasons Ions I have given it is clear that my decision is that the indorsement on the writ of summons dated 9.10.1997 and issued on the same day does not make the writ defective and irregular. A special indorsement on a writ need not be only of a claim which is a debt or liquidated demand. A writ of summons specially indorsed with other claims enumerated in Order 3 rr 5(1) to (5) is perfectly regular.

Mr Waleilia's submission about stating interest in a claim separately from the principal and costs has merit though. The formats of indorsements given in appendix A in the High Court (Civil Procedure) Rules suggest that it is the required practice to state the principal sum, cost and interest separately but as making up the total sum stated and claimed. Failure to state the interest separately, in my view, however, does not in all cases make the claim defective. Particulars can be requested or even ordered by court and if adjournment is required, the plaintiff could answer in the costs related. In any case the significance of that would usually arise at the time of entering default judgment. In full trial, discovered documents would have revealed how the total claim is made up. It is not true that only claim of interest shown as a fixed sum will qualify as part of a liquidated sum. The rule is that the interest must have been agreed upon as part of the transaction upon which the claim is based or the interest must have been authorised in a statute relevant to the transaction, the subject of the claim. The agreed interest may be a fixed sum or based on agreed rate from which it is calculated as it is in this case, and the rate may even vary over time. It is important though that the interest is claimed either in the indorsement or pleading. The old English case of Roway -v- Lucas [1855] EngR 169; [1855] 10 Exch 667 is in point. See also the Australian case of City Mutual Life Assurance Soc. Ltd -v- Ginnarelli [1977] VicRp 53; [1977] VR 463.

One of the two cases cited by Mr Waleilia is not about writ of summons or interest claimed. The other, Gurney -v- Small [1891] UKLawRpKQB 160; [1891] 2 QB 584, was about special indorsement in a writ of summons, but the issue there was different from the issue here. The English Rules at the time, the year 1891, authorised, among others, that summons for summary judgment may be taken after the defendant had entered appearance if liquidated demand had been specially indorsed on the writ of summons. When the summons for judgment was taken in the case, the indorsement comprised claim for liquidated demand as well as a claim for unliquidated demand. Amendment was applied for and effected so that the unliquidated demand was deleted from the writ, and judgment was granted. On appeal it was decided that judgment could not be entered on the summons application taken before the amendment had been effected. The issue was not whether special indorsement could not include claims other than debt or liquidated demand.

Application Dismissed

The defendant's application to set aside the writ of summons dated 9.10.1997, in this case, and issued the same day, has been an interesting exercise in legal technty, but has no merit, rit, it is dismissed. The conditional appearance now becomes unconditional appearance. The rest of the pleadings are to proceed in the normal course. Costs of the application are awarded against the defendant in favour of the plaintiff.

Mr Waleilia's submission deserves commending. The court has rejected it, but it is the sort of submission that the court is entitled to expect from counsel. Mr Waleilia was systematic; he made several specific references to written law, the High Court (Civil Procedure) Rules, to support each of his proposition of law, and cited case laws that he relied on. The court was adequately assisted in its search for the law in issue, as the result little time was taken to prepare judgment. A couple of counsel do that in our court, but only a couple. Many, solicitors/counsel who are even senior in practice simply dump facts of the case, sometimes even only party proved facts, on the court and expect judgment in the afternoon. Judgments of the High Court has consequences beyond settling the dispute between the parties in the particular case. The interpretations of the law as given by the High Court becomes the specifics of the law on similar issues to arise, unless the Court of Appeal states otherwise. Judges of the High Court have therefore to carefully research the law, a task which is onerous given the library we have and the short period over which we have accumulated judgments of the Court of Appeal and of the High Court. That is the more reason for the court to expect learned submissions from learned counsel, not commonplace hot air. Collectively more and better results of researched law can be gathered. Speaking for myself, I am contemplating ordering adjournment if there has been poor submission by counsel to enable counsel to prepare proper learned submission, and in that case costs arising may be borne by the party whose counsel was not prepared or even by the counsel personally in very bad instances, irrespective of the result of the case. I had hoped that I would not have to mention the bad state of submission, but it seems only the same solicitors/barristers who present good submissions continue to do so. The many who do not are getting worse.

Delivered on the 12 February 1998

At the High Court, Honiara

Sam Lungole-Awich
JUDGE