Korya v Hassall [2001] SBHC 61; HC-CC 175 of 2001 (29 August 2001)

HIGH COURT OF SOLOMON ISLANDS
Civil Case No. 175 of 2001

Phlip Korya, Elma Korya
and John D. Clarke

v

Peter A Hassall

High Court of Solomon Islands
Before: Frank O Kabui, J
Civil Case No: 175 of 21001

Hearing: 24^th August 2001
Judgment: 29^th August 2001

Mr. P. Tegavota for the Plaintiff
Mr. C. Ashley for the Defendant

JUDGMENT

(Kabui, J): By Summons filed on 3^rd August 2001, the Defendant sought the following orders-

1. That Exparte Order of the Court perfected, signed and Sealed on 23^rd July 2001 be now discharged, AND
   

2. That Costs be in the Cause.

This application was supported by an affidavit filed by Mr. Ashley, the Defendant’s Solicitor on 3^rd August 2001 and another filed by the Defendant on 7^th August 2001. The Defendant filed an Amended Summons on 22^nd August 2001 seeking the following orders in lieu of the orders above.

1. That the Expart Order of the Court perfected, signed and Sealed on 23^rd July 2001 b now discharged, and
   

1A. That unless, the 3^rd Plaintiff, within 7 days pays into Court SBD50,000.00 as security for Costs, the Writ and Statement of Claim as amended and any consequential orders be struck out.

2. That Costs be made against the 3^rd Plaintiff.

An Amended Statement of Claim had been filed the day before.

The Amended Summons is supported by a joint affidavit filed on 22^nd August 2001 sworn by the Defendant, and the 1^st and 2^nd Plaintiffs. The 3^rd Plaintiff filed an affidavit in reply on 21^st August 2001.

The Facts

The facts are as set out in my ruling on 23^rd July 2001. Additional facts that emerge from the affidavits filed in support of this application are these. By an Agreement dated 17^th November 2000, the Defendant agreed to purchase from KSC Fishing Pty Ltd (KSC) the vessel “Sovereign”. This Agreement was made in Australia in the State of New South Wales. The purchase price was A$740,000.00. The down payment was A$74,000.00. The balance being A$666,000.00 was to be paid by cash or bank cheque on settlement. However, the purchaser could agree to executed hand over on or before the date of settlement a stamped copy of a statutory mortgage and bill of sale over the vessel “Sovereign”. The Agreement was executed by KSC under its common seal on 17^th November 2000. The Defendant did not sign it in the space provided for his signature. The Deed of Mortgage was not dated nor executed by the Defendant and KSC. A Deed of Variation was executed on 5^th February 2001.

Ownership of the Fishing Vessel “Sovereign”

The Defendant has said he is the owner of the “Sovereign”. There are faxed copies of documents pointing to this claim by the Defendant. However, none of these documents can be said to be the ship’s Register in Australia showing particulars of ownership in the usual way. The documents can be misleading to persons who are not knowledgeable about transfer of ownership in ships. The documents attached to Mr. Ashley’s affidavit filed on 3^rd August 2001 are not conclusive evidence of ownership of the “Sovereign” by the Defendant. This position is confirmed by the Defendant himself in his affidavit filed on 7^th August 2001. The Defendant’s conduct in Solomon Islands points clearly to this conclusion that he is not the owner of the “Sovereign”. The Defendant has now had fitted that he is not the owner of the “Sovereign”.

What then is the significance of lack of ownership of the “Sovereign” by the Defendant?

The significance of lack of ownership is that in order to maintain an exparte mareva injunction against the Defendant, there must be evidence of ownership of the assets sought to be frozen by the Court Order. I think this is the basis of mareva injunctions in the earlier
cases, and throughout the years until now. The jurisdiction of the Court in granting such injunction is derived from Order 53, rule 6 of the High Court ( Civil Procedure) Rules 1964 (the High Court Rules) based upon section 45(1) of the Supreme Court of the Judicature (Consolidation Act) 1925 of the United Kingdom. The ownership link between the Defendant and the asset frozen by a mareva injunction is a basic requirement that must exist before application for such order can be made by the Applicant/Plaintiff. (see Uiga & Alick Sarere v Wilson Habo (Civil Case No.136/98). There must be an ownership connection between the Defendant and the assets being sought to hold up by the Court Order.

Should the exparte Order made on 23^rd July 2001 be discharged?

I think it should be discharged. There is no ownership link between the Defendant and the “Sovereign”. The Defendant is not the owner of the “Sovereign.” It is not his asset nor is the asset of the joint venture enterprise. Even if the Plaintiffs succeed against the Defendant, they can not seize this “Soverign” to satisfy any judgment that they may obtain against the Defendant. Although under the joint-venture agreement, the vessel was intended to be the major capital asset , it has never been transferred as an asset of the joint-venture either alone in the name of Philma Export Fisheries 105-90 of Solomon Islands or Philma Export Fisheries 105-90 of Australia or jointly in their names. By an Agreement dated 5^th August 2001, entered into with the Defendant, the 1^st and 2^nd Plaintiffs withdrew from the current action and agreed to start afresh on another agreed to start afresh on another joint venture enterprise. By that agreement the joint-venture agreement signed by the parties on 6^th November 2000 was terminated. As far as the 1^st and 2^nd Plaintiffs and the Defendants are concerned, there is nothing more to discuss under the old joint-venture agreement. The arrangement had apparently misfired and the Defendant and the 1^st and 2^nd Plaintiffs are now looking ahead to the future under a new proposed arrangement. I can understand the attitude of the of the 1^st and 2^nd Plaintiff in easily agreeing to the Defendant’s advice to forget the past and look into the future, as in the case in the Agreement signed on 5^th August 2001. The Defendant obviously will be the person who will be negotiating the financing of the new joint-venture enterprise and finding another vessel for the use of the new-joint venture enterprise. Clearly, for them the old joint-venture agreement is a thing of the past. The 3^rd Plaintiff is no longer included in their new arrangement. No one knows as he may be invited in at a later stage. This scenario clearly dictates that there is really no basis to continue the exparte Injunction in this case. I would discharge the orders accordingly.

I do not however think I can grant the Order sought in paragraph 1A of the Amended Summons. The Amended Statement of Claim filed on 21^st August 2001 till cites Philip Korya and Elma Korya as the 1^st and 2^nd Plaintiffs in this action even after they had expressed their desire to withdrew form this action. I am not sure about the 3^rd Plaintiff’s intention in this action. If he wishes to continue, he may seek leave to amend the Writ of Summons and the Amended Statement of Claim. I do not, in this regard, wish to pre-empt the 3^rd Plaintiffs next move in this case. As to costs, I think the best course to take is that each party should pay his own costs. The Defendant and the 3^rd Plaintiff do not seem to be on good terms although the 3^rd Plaintiff does not seem to know why this should be so. The fact that the “Sovereign” may be returned to it owner in Australia is not the fault of the 3^rd Plaintiff. He said he was led to believe that the Defendant was the owner of the “Sovereign” and now he knows that is not the case anymore. He came to know about this fact only after this application was filed in Court. It is clearly the Defendant who was not able to secure the ownership of the “Sovereign” to sustain the operation of the joint venture agreement signed on 6^th April 2000. In the result, the Order of this Court is that-

1. The Exparte Order signed and sealed on 23^rd July 2001 be discharged;

2. Security for costs in the sum of $50,000.00 is refused;

3. Each party is to meet his own costs.

F.O. Kabui
Judge