(Frank Ka):-
By Notice of Motion filed on 2nd July 1999, the Plaintiff seeks
the following orders:-
class="Mso="MsoNormal" style="text-indent: -34.9pt; margin-left: 70.9pt; margin-top: 1; margin-bottom: 1">
1. &bsp; thRt a ver be appointed toed to take under his control and care
the operation and management of the two
ships “M.V. Tavuilo” and the
“Ma’ali> andher tspan>
a) &nbssp; &nsp;&nbp; investigato, ifentify and and report to the Court such
properties and assets as have been acquired
by the Defendant within the six
years prior to the filing of this action which have so aed
wit with funh funds eads
earned by and through the commercial operations of the two ships
herein; and
b) &nnbsp;; nbsp;nbsp; cop; collect and analyse such financial and accounting records and
Statements on the operations
of the two ships herein and from the said
records and statements to prepare an account of the financialormance of
the
two shwo ships within the six years prior to the date of filing this action.
2. &nnbsp;;&nspp; tsp; the Defe Defendant his agents, employees and family members be
restrained from interfering with
the workny Rer to pointed by
the Court;
3. &nbs; &nbbsp;  h otch other orders asrs as this Court deems just and equitable in the
circumstance.
1">
4. costs to be in the .ausean/span>
&nn">
>
This Noof Motion is based upon the Plaintiff’s Statement of Claim laim filed
on 2nd July 1999 that same date the Notice of Motion was filed.
The Defendant by another Notice of Motion filed on 8th July 1999
seeks to dismiss the Plaintiff’s Statement of Claim on the basis that the
Statement of Claim is time-barred
under the Limitation Act (Cap. 18). The
Defendant also seeks an order for security of costs in the sum of $100,000
and any further orders as the
Court deems fit plus cost. By agreement of
Counsel for the parties, the two Motions were heard by the Court together on
19th July, 1999.
The Facts
The facts as disclosed by the affidavits filed are these. The Plaintiff and
the Defendants are members of the same extended
family in the Langa Large
Lagoon on Malaita. In about 1977, they got together and decided to build a
ship. The ship,
when completed was named, “M.V. Tavuilo”. In about
1979, they built another ship. The ship, when completed was named, “M.V.
Sa’alia”. The two ships are now said to be owned and operated by the
Defendant under the business name “Mao Faita Shipping Services”. The
Plaintiff now claims that he has an interest in these two ships according to
an agreement with the Defendant prior
to the construction of each of the two
ships.
ass="Mso="MsoNormal" style="margin-top: 1; margin-bottom: 1">
The Deft’s Motion
The Defendant’s Motion is aimed feating the Plaintiff’s clas claim on the
ground that it is out of time under section
5 of the Limitation Act (Cap.
18) which states, “Except as otherwise provided in this Act, no action
shall be brought, nor any arbitration shall commence, after the expiration
of six years from the date on which the cause of action accrued.” The
normal practice would be for the Defendant to file a defence and plead the
defence of the statute of limitation under
Order 21, rule 16 of the High
Court (Civil Procedure) Rules, 1964 (the High Court Rules). At that point of
pleading,
either the Plaintiff or the Defendant under Order 27 of the High
Court Rules may raise any point of law for the determination
of the Court
before the trial if in the opinion of the Court, the decision of the Court
on such point of law would substantially
dispose of the whole action for the
sake of saving litigation cost. The Court may also dismiss such application
if it
thinks fit. There is obviously a discretion in the Court to exercise
its powers in the interest of justice in each case. (See
my Judgment in
Joses Wawari Sanga & Others v Public Service Commission, (PSC) Haikiu Biabe
and Attorney-General Civil Case No. 01899) (unreported). Mr. Nori’s
response to the Defendant’s Motion was that section 14(1)(b) of the
Limitation Act applied in that there was no time bar against the recovery of
trust property or proceeds of trust property in possession of
the trustee or
previously received by the trustee and converted to his use. Section 14 of
that Act states-
“1) &bsp; ;&nbssp; Nop; No prescribedribed period shall apply to an action brought, or to an
arbitration commenced, by
a beneficiary under a trust, being an action or
arbitration:
a) ip resofct y fanud oa frau fraudulent breach of trust to which the
trustee was a party or privy; or
p clasoNorstylet-ind-34.3margin-left: 106.35pt; margin-top: 1; mar; margin-bgin-bottomottom: 1">: 1">
b) &nb) & tsp; to recover from the trustee trust property or the proceeds thereof
in possession of the trustee, or
previously received by the trustee and
converted to his use.
2) ;&nspp; Ssbject as aforesairesaid, no action shall be brought nor any
arbitration shall commence by a beneficiary
to recovust pty, o
ect o breach of trust, after the expiration of six yearsyears from from the the
date date on which
the cause of action accrued:
Prd that the cause of action tion shall not be deemed to have accrued to any
beneficiary entitled to any future interest
in the trust property, until the
interest fell into possession.”
Mr. Nori further argued that the Defendant’s conduct regarding the ruhe running
of the two ships was a continuing one
and therefore the cause of action on
trust was not statute barred under section 17 of the Limitation Act. Section
17 of the Limitation Act states “Subject to the other provisions of this
Act, a cause of action shall be deemed to accrue on the date on which the
right
to relief sought by an action first arises: Provided that where the
cause of action is founded on a continuing wrong, a fresh
cause of action
shall be deemed to accrue on each day the wrong continues”. Mr. Kwaiga,
Counsel for the Defendant, on the other hand, argued that section 5 of the
Act clearly applied to contracts
and therefore statute barred, whilst
section 14 did not apply as there was no evidence of a trust in this case.
At least,
that is how I understood Mr. Kwaiga’s position. Whilst these
opposing arguments can be considered by the Court, they do not
necessarily
result in any form of finality to the issues in this case. That is to say,
on the affidavit evidence before
the Court, it is rather inclusive, to say
the least, to decide the issues raised in this case without the opportunity
of hearing evidence to the fullest at the trial of this action. There is so
far some evidence of the existence of a contract,
a trust and partnership
but which is which in the alternative will not become clearer until all the
evidence is adduced
at the trial of this action. This is why the Court has a
discretion to decide such application as this. This point was also
made by
the Solomon Islands Court of Appeal in Price Waterhouse & Others v Reef
Pacific Trading Limited & Another (Civil Appeal No. 4 of 1995)
(unreported). The same was repeated by Palmer J in Samuel Saki & Others v
Ross Mining (Solomon Islands) Limited & Another (Civil Case No. 169 of
1997) (unreported) at pages 3 - 5 of His Lordship’s judgment. I again
emphasised the same at page
5 of my judgment in the Joses Wawari Sanga’s
case referred to above. There is also the possible application of section 39
of the Limitation Act which allows the Court to condone delay in actions
under certain circumstances. In my view, it is premature on the facts of
this case for the Court to conclusively decide the question of time
limitation under section 5 as read with section 14
of the Limitation Act.
The final position would largely depend upon how the evidence will come out
at the trial. I therefore refuse the Defendant’s
application on this basis.
<
The Plaintiff's Motion
The same question is still whether or not aiver should be appointed ined in
this case. In other words, is there any prima
facie evidence of title to
property in this case. There is no doubt that ships can be the
subject-matter of a Court appointed
receiver. R. WALTON in KERR ON
RECEIVERS, Fifteenth Edition, 1978 at page 90 says, “A receiver has been
appointed of a ship, of a ship and her gear, of freight of a ship and of the
machinery of a steam
vessel. So, also , a receiver may be appointed when an
action of co-ownership is brought by the owner of one moiety of a vessel
against the owner of the other moiety”. There are however, two types of
cases in which an appointment of a receiver can be made. The first type are
cases where
existing rights over property are being protected where ordinary
legal remedies are not effective such as cases of equitable
execution. The
second type are cases where an appointment of a receiver is necessary to
preserve the property pending
the trial to sought out the rights of the
parties to the litigation. This case would obviously be in this second
category.
Again, R. WALTON in KERR ON RECEIVERS above at pages 6 - 7 sets
out in these terms the whole regime of subject-matters and
considerations
that are involved in the second type of cases of receivership: “The
second class of cases includes those in which the appointment is made to
preserve property pending litigation to
decide the rights of the parties, or
to prevent a scramble among those entitled, as where a receiver is appointed
pending
a grant of probate or administration, or to preserve property of
persons under disability, or where there is danger of the
property being
damaged or dissipated by those with the legal title, such as executors or
trustees, or tenants for life,
or by persons with a partial interest, such
as partners, or by the persons in control, as where directors of a company
with equal powers are at variance. In all cases within this second class it
is necessary to allege and prove some peril to
the property; the appointment
then rests on the sound discretion of the court. In exercising its
discretion the court
proceeds with caution, and is governed by a view of all
the circumstances. No positive or unvarying rule can be laid down as
to
whether the court will or will not interfere by this kind of interim
protection of the property. Where, indeed, the
property is as it were in
medio, in the enjoyment of no one, it is the common interest of all
parties that the court should prevent a scramble, and a receiver
will
readily be appointed: as, for instance, over the property of a deceased
person pending a litigation as to the right
to probate or administration.
But where the object of the plaintiff is to assert a right to property of
which the defendant
is in enjoyment, the case presents more difficulty. The
court by taking possession at the instance of the plaintiff may be
doing a
wrong to the defendant; in some cases an irreparable wrong. If the plaintiff
should eventually fail in establishing
his right against the defendant, the
court may by its interim interference have caused mischief to the defendant
for
which the subsequent restoration of the property may afford no adequate
compensation. Where the evidence on which the court
is to act is very
clearly in favour of the plaintiff, then the risk of eventual injury to the
defendant is very small,
and the court does not hesitate to interfere. Where
there is more doubt, there is, of course, more difficulty. The question
is
one of degree, as to which, therefore, it is impossible to lay down any
precise or unvarying rule. If the court is
satisfied upon the materials it
has before it that the party who makes the application has established a
good prima facie
title, and that the property the subject-matter of the
proceedings will be in danger if left until the trial in the possession
or
under the control of the party against whom the receiver is asked for, or,
at least, that there is reason to apprehend
that the party who makes the
application will be in a worse situation if the appointment of a receiver be
delayed, the
appointment of a receiver is almost a matter of course. If
there is no danger to the property, and no fact is in evidence to
show the
necessity or expediency of appointing a receiver, a receiver will not be
appointed. The duty of the court upon
a motion for a receiver is merely to
protect the property for the benefit of the person or persons to whom the
court,
when it has all the materials necessary for a determination, shall
think it properly belongs... The court, on the application
for a receiver,
always looks to the conduct of the party who makes the application, and will
usually refuse to interfere
unless his conduct has been free from blame.
Parties who have acquiesced in property being enjoyed against their own
alleged rights cannot, except in special circumstances, come to the court
for a receiver.”
<
In this case, both the M.V. Tavuilo and M.V. Sa’alia would appe appear to be
community properties or assets to be operated
by the Defendants for the
benefit of the Plaintiff and other recognised persons within the extended
family of the Plaintiff
and the Defendant. I would liken it to ownership in
customary land although ownership of customary land is by descent rather
than sweat equity as in this case. But the sense of ownership is the same. I
therefore find that the Plaintiff has got
a good prima facie title to any of
the 64 shares in each of the two ships in question. This must obviously be
the basis
for the Plaintiff's claim for benefits arising out of the running
of the two ships by the Defendant on the Plaintiff’s behalf
and others.
There is however no evidence that the two ships are in any great danger of
being destroyed or being sold
by the Defendant. What benefit is the
Plaintiff expected to receive out of the appointment of a receiver? I would
say
it is impossible to say on the evidence before the Court. Is the
Plaintiff to be paid his share of the benefits of the operation
of the
ownership of the two ships? There is no evidence as to how many shares he is
entitled to in the ownership of the
two ships and thus the proportionate
payments to be made to him by the receiver if appointed. The investigation
of properties
and assets acquired by the Defendant in the last 6 years and a
report on the accounts of the Defendant’s operation of the two
ships is not
really the function of a receiver. Furthermore, there is no allegation of
fraud against the Defendant. The
Defendant is a sole trader under the
business name of “Mao Faita Shipping Services”. There is no evidence
to suggest that the Plaintiff would be worse off than he already is if an
appointment of a receiver
is delayed. The Plaintiff has waited 20 years
without enforcing his rights over the two ships. There is no evidence in
this case to suggest that the facts in this case do present special
circumstances that call for the appointment of a receiver.
A consideration
in favour of the Defendant is that “Part owners frequently delegate
authority in respect of the managing of the ship to one of their number, who
is known
as the managing owner. The managing owner is agent for all the
other Owners, with power to do what is necessary to enable the
ship to
prosecute her voyage and to earn freight. Managing owners or managers must
be registered as such, and must notify
the Department of Trade of the loss
of their ships” (see Halsbury’s Laws of England, Fourth Edition
vol.43, para. 125 at 92). This would appear to be position here on the
evidence before the Court. By
virtue of the survey Certificate No. 106
(Exhibit “JF1” attached to the Defendant’s affidavit sworn and filed on
8/7/99,
the Defendant says he is the sole owner of the two ships in
question. However, in the Business Group Policies (Exhibit “JF3”),
to this
same affidavit, the Defendant is said to be the majority shareholder meaning
the Plaintiff being the minority
shareholder with others. I do not think the
Survey Certificate No. 106 (Exhibit “JET”) is conclusive evidence of
ownership
of the two ships in question by the Defendant. True ownership of
ships must be in accordance with section 18 of the Shipping
Act, (No. 5 of
1998). In the absence of any documentary evidence of ownership being a
Certificate of Registry under section
18 of the Shipping Act, it is
difficult as yet to determine who is the majority owner of the two ships.
However, clearly the Defendant has so
for been conducting himself as the
majority owner of the two ships with the acquiescence of the Plaintiff since
they
were commissioned into service. This has been the position until the
Plaintiff commenced this action. This being the case,
the prima facie right
to possession and control of the two ships lies with the Defendant. As
stated in paragraph 127
at 93, Halsbury Laws of England, Fourth
Edition, Volume 43, “The right to the possession and control of the ship
lies with the majority of the owners, or, as they are usually called, the
majority owners. Where the majority owners desire to send the ship on a
particular voyage but she is in the possession
of a dissenting minority, the
majority owners may arrest the ship and obtain from the court a decree of
possession, so
that they may be enabled to employ the ship as they wish.
Similarly, where the minority owners object to the voyage on which
it is
proposed the ship shall be sent, they may arrest her and sue for an order
that she be restrained from pursuing
the voyage. In either of these cases,
before the majority owners are permitted to send the ship on the desired
voyage
they will be compelled to give security for the safe return of the
vessel. Where the minority owners object to the prosecution
of a particular
voyage, they are not obliged to contribute to the expenses of the voyage but
will not, on the other hand,
be entitled to any of the profits.” On the
whole, I am not satisfied that this is a case where a receiver should be
appointed. The Plaintiff’s application
is therefore refused.
<
There will be cost in the cause.
F. O. Kabui
Judge
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