Kimitora v Home Finance Corporation [1998] SBHC 53; HC-CC 001 of 1998 (9 March 1998)

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T Kama for the plaintiffs
Mrs L Tepai for the first defendant
A Radclyffe for the second defendant

(LUNGOLE-AWICH, J): The Application: Following service of writ of summons on the second defendants, John Ipo and Joanna Ipo, husband and wife, they applied for three orders. The application was drafted as I quote here:

“Let the parties attend before a Judge in Chambers at the High Court, Honiara on Thursday the 12th day of February 1998 at 4 o’clock in the afternoon on the hearing of an application by the Second Defendants for the following orders:-

“1.	An order for immediate possession of Parcel No. 192-002-14.
2.	Strike out the claim against the Second Defendants on the grounds that no cause of action is disclosed.
3.	That the plaintiffs pay the costs of this summons.”

I did not regard the application as chamber application, I heard it in open court. The first defendant, Home Finance Corporation of Solomon Islands, took advantage of the application and made submission for order to strike out, supporting the submission made by the second defendants.

Learned counsel Mr Kama, for the plaintiffs, Burnley Kimitora and Florrie Kimitora, also husband and wife, opposed the application to strike out, but first objected to the application on the basis that the defendants had forfeited the right to apply for order striking out the statement of claim because they had taken the next necessary steps after, by filing appearance and, in the case of the second defendants, by filing affidavits. The affidavits were those sworn on 14.1.1998 filed the same day and another sworn on 16.2.1998 filed the same day. The second affidavit was filed in reply to the affidavit filed by the plaintiffs in support of their case opposing the application to strike out and so cannot be regarded as an otherwise necessary step taken in the case. The first one seems to be in support of one of the three orders; order 2 for possession. Again it is really not a necessary step in the case. In any case, the plaintiffs have not suffered any prejudice and facts exist upon which the court would exercise discretion to waive that rule.

Application for order to strike out statement of claim is not usually supported by affidavit. For example, in Peter Ma’uana -v-Solomon Taiyo Ltd HC-CC 109/97, parties informed the court that they would proceed without affidavits and Muria CJ accepted that. The reason for not filing affidavit with application to strike out is that the facts attacked in the application would already be on the case file, the crux of the application being that the facts therein are inadequate to disclose the complaint required and the law applicable so that the relief claimed may be granted by court.

I would also dismiss the objection of Mr Kama on the ground that the rule about taking next step following, is applicable in application to set aside on the ground of irregularity. The application here is not about irregularity or setting aside.

The plaintiffs opposed the application to strike out the statement of claim, stating that their statement of claim as amended, disclosed strong cause of action. Mr Kama’s submission was by going through the paragraphs of the statement of claim as amended by consent, and by reading affidavit filed specifically in opposition to the application to strike out.

The defendants’ application that the writ be struck out because the statement of claim does not disclose cause of action is, though not stated, made under Order 27 rule 4 which reads:

ORDER 27

4. The court may order any pleading to be struck out, on the ground that it discloses no reasonable cause of action or answer, and in any such case or in case of the action or defence being shown by the pleadings to be frivolous or vexatious, the Court may order the action to be stayed or dismissed, or judgment to be entered accordingly, as may be just.

The Rules do not give the definition of the expression cause of action. From case law, I may formulate a working definition that cause of action is the stated facts and law upon which the plaintiff relies for his claim or the defendant relies for his counterclaim, for the stated relief. Two relevant Solomon Islands cases are: Leslie Allinson -v- Monique Medlin Civil Appeal case No. 7 of 1996 and Peter Ma’uana -v- Solomon Taiyo Limited HC-CC No. 109 of 1997. The rule is that when the facts in the statement of claim on the face, do not sufficiently state the complaint and the law applicable, then there is no cause of action, the statement of claim and the relief claimed may be struck out and the case dismissed. Two of the old English cases in which the rule developed are, Attorney General of the Duchy of Lancaster -v- London and North Western Railway Company [1892] UKLawRpCh 134; [1892] 3 Ch 274 CA and Goodson -v- Grierson [1908] UKLawRpKQB 32; [1908] 1 KB 761.

So in this case, it is Mr Radclyffe’s contention that so far, even after the plaintiffs’ application for amendment has been agreed to, there are no facts and laws upon which the plaintiffs are entitled to the reliefs they claim. The reliefs they claim are very extensive, perhaps suggesting doubt in the minds of the plaintiffs. I quote them here as stated by the plaintiffs:

In my view, the reliefs may simply be summarised as order that sale by the first defendant to the second defendants was invalid and that the first defendant is to proceed to sell the estate in the land to the plaintiffs. Are there facts in the statement of claim upon which that conclusion from the law applicable may be made? I do not think so. The plaintiffs’ material facts state four points: 1. that there was a policy of the first defendant to sell houses to sitting tenants. 2. that the plaintiffs were sitting tenants at the time the house, on land parcel No. 192-002-14, was sold to the second defendants 3. that the plaintiffs had made offer to buy and the offer had not been accepted or rejected by the first defendant and therefore had not terminated when the land was sold to the second defendants; and 4. that the plaintiffs had made offer to buy the house and had obtained promise from the first defendant that the plaintiffs would be given first option to buy (see paragraph 5).

From those facts the plaintiffs say that the first defendant was bound to sell to the plaintiffs because the law requires so. In the statement of claim, they have mentioned the heads of law as: 1. “natural justice” that they were entitled to be given, “notice” (see para 8), 2. that policy enjoins the first defendant in law to act only according to the policy, 3. that there was valid offer made by the plaintiffs that was neither accepted nor rejected by the first defendant, in law, the house could not be sold in the circumstances, 4. that there was a contract in which the first defendant agreed to give the plaintiffs first option to buy, conversely put, that there was contract that the first defendant would make first offer to sell to the plaintiffs and according to law, the first defendant was bound to do so before offering the house to the second defendants, and 5. that the court has power to review the decision of the first defendant to sell the house to the second defendants.

In an application to strike out, the court assumes the facts averred to be true, except in exceptional cases where it is obvious that the facts are not true. In this case even if the facts averred as amended are taken as true, the propositions of law in 1,2 and 5 cannot be accepted. Policy cannot be taken as law, unless enacted, and there is no rule of natural justice that requires giving of notice in those circumstances. As regards 5, there are no facts about the status of the first defendant, or the nature of the decision taken by the first defendant to sell, so as to bring the decision under the power of the court to review it. The proceedings for review is, in any case, by application not by action. The plaintiffs would have to come to court by application for review.

There seems to be a weak case in paragraph 5 of the statement of claim, as to whether there was a contract under which the plaintiffs were entitled to first option to refuse or accept offer of the first defendant to sell. There is even a weaker case as to whether there has been valid offer to buy which has not been rejected or accepted, but a case nonetheless, see paragraphs 6,7 and 8 of the statement of claim. The rule in striking out for lack of cause of action does not require that there be a strong case, it requires that reasonable cause of action be disclosed. There are decided cases in which it has been said that for the court to strike out, the lack of cause of action must be clearly demonstrated, the plaintiff’s case must be clearly untenable, the onus is on the applicant. See for example General Steel Industries Inc. -v- Commissioner for Railways (NSW) and Others [1964] HCA 69; [1964] 112 CLR 125. In the case, the plaintiff’s claim was struck out because it was clearly untenable, the Commissioner for Railways was an Authority of the state and was afforded protection by statute, from claim for breach of patent. In this case I find that reasonable, though weak causes of action have been disclosed only as to whether valid offer has been made and had not terminated at the time of sale to the second defendants, and as to whether there was a contract giving the plaintiffs first option to buy the house.

The application to strike out has succeeded in discrediting large part of the plaintiffs’ case, but does not succeed in entirety. The application is refused and dismissed. The plaintiffs are to amend their claims so as to be based only on whether (a) there had been firm offer from the first defendant to sell the house to the plaintiffs, which offer had not terminated when the first defendant sold the house to the second defendants, and (b) whether there had been a contract giving first option to the plaintiffs to accept or refuse the first offer of the first defendant to sell the property.

Order No. 1 applied for by the second defendants would require that the second defendants be put in immediate possession of the premises. The ground was that the second defendants were and are still the present registered estate holders. They seem to have very strong case, but I think they seek their relief in an irregular proceeding. They could have much earlier brought their case independently, not as part of the application in this case to strike out the plaintiffs’ statement of claim. They could, on the other hand, plead their claim for possession as counterclaim in this case. That application is also refused and dismissed.

There are good reasons to deny the plaintiffs costs despite their partial success. Costs will be in the cause.

High Court of Solomon Islands

Kimitora v Home Finance Corporation [1998] SBHC 53; HC-CC 001 of 1998 (9 March 1998)