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By a Writ of Summons specially
indorsed filed on 2nd February 1999, the Plaintiff claimed the
ownership of the Vessel M.V. Delores. By an Order of the Court dated
4th February 1999, the
Defendant was restrained from removing the MV Delores from the waters of
Solomon Islands by whatever
means as well removing it from Gizo to any other
place in Solomon Islands. The Defendant was also prevented from boarding the
vessel for whatever purpose. Sol-Law entered appearance on behalf of the
Defendant on
11th
February 2000 about 5
months later. The Court Order dated
4th
February 1999 was
subsequently discharged on
10th
April 2000. An Amended
Writ of Summons was filed by the Plaintiff on
5th
May 2000 in which the
1st and 2nd
Plaintiffs claimed, amongst other things, ownership of MV Delores since
1982, the year it was built. In their defence
filed on
14th
June 2000, the
Defendants denied that the Plaintiffs were the owners of MV Delores any more
because the 1st
Plaintiff transferred the ownership of the MV
Delores by way of a Bill of Sale executed on 21st February 1997,
the transfer being the result of a Deed of Settlement dated 24th
December 1996. The Defendants then counter-claimed for damages arising from
wrongful arrest of the vessel. An amended
defence was later filed on 18th
August 2001 with an amended counter-claim. The Plaintiffs have so far not
filed a defence to the Defendants’ counter-claim.
Issues
raised in the Defendants' Amended Counter-Claim
The
first issue is that the Deed of Settlement and the Bill of Sale were
executed by the Plaintiffs whilst the Bill of
Sale was executed with the
authority of the 2nd Plaintiff thereby transferring ownership of
the vessel to the 2nd Defendant. The second issue was that the 1st
and 2nd Plaintiffs were the registered owners of the vessel in
Solomon Islands and therefore had the authority to execute the Deed
of
Settlement, the Bill of Sale and the Deed of Assignment to transfer
ownership of the vessel to the 2nd Defendant. The third issue was
that the Plaintiffs (or the 1st Plaintiff) were wrong in
attempting to procure the arrest of the vessel on or about the 4th
February 1999, contrary to the Deed of Settlement and the Bill of Sale and
the 2nd Defendant. In the alternative, if (which was denied) the
1st Plaintiff did not have authority of the 2nd
Plaintiff to execute the Bill of Sale then he was guilty of fraud and the
Defendants suffered loss and damage arising
from reliance upon the
Plaintiffs' (or the 1st Plaintiff’s) representation upon which
the Defendants executed the Deed of Settlement, accepted the Bill of Sale
and
took possession of the vessel and later executed the Deed of Assignment.
Based upon these issues, the Defendants sought a
declaration that the 2nd
Defendants was the rightful owner of the MV Delores pursuant to the Bill of
Sale executed in favour of the 2nd Defendant and consequential
orders to that effect. In the alternative, the Defendants claimed damages
for fraudulent
representation and/or breach of warranty of authority plus
interest thereon.
The Plaintiffs’ case as
defendants in tunter-Claim
Counsel for the Plaintiffs, Mr.
Ashley, argued that this case should proceed to trial as the issue in
dispute was clearly
the ownership of the MV Delores. He argued that the
Defendants’ counter-claim was not really a counter-claim because it simply
repeated the issue of ownership of the MV Delores which was, in this case,
already in dispute. He relied upon the judgment
delivered by Awich, J. in
Earthmovers (Solomon) Limited (Trading as Pacific Timbers) v Samuel Thao and
Others (Trading as Aola Timber Export Agency) (Civil Case No. 65/1997)
where Awich, J. expressed the view that the counter-claim in that case was
really an elaboration
of the defence already filed.
The Defendants’ case as
Plaintiffs in the Counter-Claim
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Counsel for the Defendants (as
the Piffs), Mr. Katahanas, basically relied upon Order 25, rule rule 2, as
read with Order
22, rule 13 and Order 23, rule 6 of the High Court (Civil
Procedure) Rules 1964 (the High Court Rules). The effect of these
Orders and
rules, he said, was that the Plaintiffs (as the Defendants) in the
counter-claim failed to deliver a reply
and a defence within 14 days from 14th June 2000 in respect of
the first Defence and counter-claim of that date. He said no reply and
defence were also delivered
within 14 days from
18th
September 2001 being the date of the Amended Defence and Counter-Claim. He
said no explanation had been made to justify
the delay on the part of the
Plaintiffs. This being the case, he urged me to apply Order 29, rule 8 of
the High Court
Rules. Rule 8 states,
…“In
all other actions than those in the preceding Rules of this Order
mentioned, and those to which Rule 14 of this
Order applies, if the
defendant makes default in delivering a defence, the plaintiff may set
down the action on motion
for judgment, and such judgment shall be given
as upon the statement of claim the Court shall consider the plaintiff to
be entitled”…
Embedded
in this rs the discretion of the Court. I can do no better than quote
the words of the Law Lorw Lords on this point
in Charles v Shepherd [1892]
2 Q.
B.
D.
622 when the equivalent of our Order 29, rule 8 above was placed under their
scrutiny. At page 623, Lord Esher, M.
R.
said,
...
“We have consulted the members of the other division of the Court of
Appeal upon the question of the construction
to be placed upon Order
XXVII, r. 11, and we are of opinion, upon the true construction of that
rule - first, that
the Court is not bound to give judgment for the
plaintiff, even though the statement of claim may on the face of it look
perfectly clear, if it should see any reason to doubt whether injustice
may not be done by giving judgment; it has
a discretion to refuse to make
the order asked for; and secondly, that the expression,
“such judgment as upon the settlement of claim taim the Court or a judge shall
consider the plaintiff to be entitled to”,
includes an interlocutory judgment, to be subsequently worked out, as well
as final judgment”...
At pages
624 - 25 Bowen L.
J.
said,
…“I
am of the same opinion. The proper construction of this rule has been put so
clearly and effectively by the Master
of the Rolls that I will not add one
word which can qualify, alter, or modify what he has said. But I may point
out that
this rule is one of which the application is not limited to common
law actions, nor to claims for liquidated demands or the
detention of goods,
but extends to a very large class of Chancery actions, and that it is
therefore most necessary to
place upon it such a construction as shall not
limit its operation unduly. It is necessary that we should hold that under
it a judgment may be given which falls short of a final judgment, for in
many classes of cases final judgment cannot be
given at the outset, and the
judgment given must be one that is interlocutory in its nature, and requires
to be worked
out”...
/p>
On the
ame point, Kay L.
J.
agreed entirely. Secondly, Mr. Katahanas disputed the correctness of the
view expressed by Awich, J. as being contrary
to established principles. He
argued that a counter-claim could be based upon the same subject-matter as
that already
pleaded in the defence.
What t is to be done in this case?
There is
no doubt in this caat no reply and defence had been delivered by the
Pla Plaintiffs within the time limit prescribed
by the High Court Rules. It
would have been better if the Plaintiffs (now Defendants) in the
counter-claim had delivered
a defence to enable the
matter
to proceed to trial as seemed to be their wish as indicated by their
Counsel, Mr. Ashley, at the hearing. I do
recognise Mr Ashley’s point that
he did not bother to file a defence to the counter-claim because, in his
view, the counter-claim
simply repeated the fact that the ownership of the
MV Delores was in dispute, the very issue that ought to go to trial. There
was of course the counter-claim, in the alternative, for damages based upon
fraudulent misrepresentation and/or breach
of warranty of authority. However
convinced he was about his position, he should not have just sat and waited
for the
matter to be listed for hearing. He would have known that the
Defendants (as Plaintiffs) would exploit that omission to their
advantage as
they now have done. He should have filed his reply and defence and allowed
the matter to proceed to trial.
In this regard, I express no view upon the
judgment delivered by Awich, J. referred to in the Earthmover's case
cited above. The facts in that case were not stated in detail in Awich, J’s
judgment but from what I can gather it seems
to suggest that the common
issue there was ownership of land. The Plaintiffs said the land was theirs
and the other side
counter-claimed the same. Awich, J. came to a different
conclusion on the point before him. In this case, I would approach
the point
in a different way based upon the facts of this case. In my view, Mr. Ashley
should have invoked Order 27,
rule 2 of the High Court Rules when he
realized that having seen the counter-claim, the common issue in dispute was
the
ownership of the MV Delores. This issue being a point of law that could
be determined under Order 27, rule 2 of the High Court
Rules, would have
been raised and disposed of to save the cost of trial. This opportunity has
now been missed in terms
of Order 27, rule 2 of the High Court Rules because
the Court does not have the power to intervene independently of the parties
under Order 27, rule 2 above. Taking no action would have taken him nowhere
because lack of defence on his part to the
counter-claim would suggest
admission of liability which he denied or alternatively, lack of it would
stall the progress
of the case. However, I do take the point that he relied
on the Earthmover’s case cited above and when the Defendants (now the
Plaintiffs) in the counter-claim moved for judgment in default of defence,
as done in this case, he would simply urge the Court as he did in this case
to dismiss the application on the ground that
the counter-claim was not a
counter-claim. He would have expected the case to proceed to trial after the
dismissal of
the counter-claim. This was obviously
his line of thinking in
this case. Something however still can be done under Order 37, rule 2 of the
High Court Rules
to sort out the issue of ownership of the MV Delores. I
would apply Order 37 of the High Court Rules to sort out the issue
of
ownership of the MV Delores. I could refuse the Defendants’ Notice of Motion
and order that the Plaintiffs (now the
Defendants) file their defence within
a specified time. The delay by the Plaintiffs (now the Defendants) is
obviously
deliberate based on Awich, J.’s judgment in the Earthmover's
case cited above. I think this case calls for a different treatment
under the High Court Rules. To grant the orders sought would
really be
accepting that ownership of the MV Delores is vested in the
2nd
Defendant without a trial. I do not think I can grant the orders sought by
the Defendants in their Notice of Motion. This
is not a simple case of debt
recovery or a case where judgment for Defendants by the nature of the
Plaintiff’s claim
is inevitable. Ownership of the MV Delores
is hotly disputed by the parties. This is the common and overriding issue in
this case. I would refuse the Defendant's application. I would intervene and
direct under Order 37, rule 2 above, that the
issue of who has the legal
ownership of the MV Delores be raised for the opinion of this Court by a
special case stated
or by Originating Summons under Order 58 of the High
Court Rules. An example of a special case stated can be found in
Duncan v
Lambeth London Borough Council
[1968] 2 W.
L.
R. 88. I
also refer to Order 58 of the High Court Rules because affidavit evidence
already filed in Court may well be the evidence
upon which a determination
can be made by the Court under Order 58 above. I would leave to Counsel for
both parties to
decide by which of these two means they intend to refer the
matter to the Court for its opinion. Costs be in the cause.
F.O.
Kabui
Judge
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