Kololeana Development Company Ltd v Amiki [2003] SBHC 77; HC-CC 083 of 1998 (5 November 2003)

HIGH COURT OF SOLOMON ISLANDS

Civil Case Number 83 of 1998

KOLOLEANA DEVELOPMENT COMPANY LIMITED
AND MEGA CORPORATION LIMITED

V.

OLUPATU AMIKI AND TEN OTHERS
(ORIGINAL ACTION)

AND BETWEEN

OLUPATU AMIKI AND TEN OTHERS

V.

KOLOLEANA DEVELOPMENT COMPANY LIMITED
AND MEGA CORPORATION LIMITED
(BY COUNTERCLAIM)

HIGH COURT OF SOLOMON ISLANDS
(PALMER J.)

Date of Hearing: 20^th October 2003
Date of Judgment: 5^th November 2003

Pacific Lawyers for the Second Plaintiff
A & A Legal Service for the Defendants

PALMER J.: On 7^th March 2003 this Court gave judgment and made orders in the case Kololeana Development Company Limited (“KDCL”) and Mega Corporation Limited (“MCL”) v. Olupatu Amiki and ten Others (“the Defendants”)^[1] as follows:

1. Grant judgment to the Plaintiffs in the sum of $21,000-00 being the value of five items stolen by the Defendants with interest at 5%.
   
2. Grant judgement to the Defendants on their Counterclaim.
   
3. Declaration that the timber rights agreement of 13^th September 1996 between KDCL and the representatives of the Eapa, Gaso and Igolo tribes (Landowners) was null and void.
   
4. Consequential orders that the extension of the timber licence no. TIM 2/34 on 18^th April 1997 to include West Kohinggo was null and void.
   
5. Consequential orders that KDCL and MCL had trespassed onto the customary lands of the Defendants.
   
6. An award for damages for trespass to be assessed.
   
7. Consequential orders for damages to be awarded to the Defendants for the conversion of trees felled and exported over West Kohinggo to be assessed.
   
8. Interest of 5% awarded to the Defendants.
   
9. Costs of the Defendants to be borne by KDCL and MCL.
   

On 25^th September 2003, MCL filed Summons pursuant to Order 45 rule 19 of the High Court (Civil Procedure) Rules 1964 (“the Rules”) for stay of the Judgement of this Court dated and delivered 7^th March 2003 (ibid) on the Counterclaim of the Defendants. MCL argues that the said orders of the court should be stayed in that it had obtained judgment in Mega Corporation Limited v. Kololeana Development Company Limited^[2] in respect of the same timber rights agreement dated 13^th September 1996 for false representation, negligence and breach of statutory duty. KDCL had represented to MCL that it had completed and complied with all the requirements of the Forest Resources and Timber Utilisation Act [Cap. 40]. MCL relied on that representation and entered into a logging contract with KDCL to carry out the logging operation in West Kohinggo. That agreement was declared null and void by this court in the judgment of 7^th March 2003.

MCL’s application for stay is premised on the submission that by virtue of that judgment in default against KDCL, it was in a position to off-set such amount already awarded to the Defendants in HCSI-CC 83 of 1998 and extinguish it. Mr. Hapa submits this brings MCL’s case within Order 45 rule 19 of the Rules and that special circumstances exist which warrant the exercise of the Court’s discretion in favour of a stay. Learned Counsel cites in support the case of Burnet v. Francis Industries plc^[3] in which Bingham LJ had sought to provide some guidelines as to the “special circumstances” which the Court may take into account when considering whether or not to order a stay of execution of a judgment. These were summarized in the headnote as follows:

“(a) the nature of the plaintiff’s claim,

(b) the extent of the identity between the defendant and the other party,

(c) the interrelationship of the respective claims by the plaintiff against the defendant and by the other party against the plaintiff,

(d) the strength of the other party’s claim,

(e) the size of the other party’s claim relative to the plaintiff’s,

(f) the likely delay before the merits of the other party’s claim against the plaintiff would be decided,

(g) the extent of the prejudice to the plaintiff if he was denied the fruits of his judgment until the other party’s claim was determined, and

(h) the risk of prejudice to the other party if the defendant were to make payment to the plaintiff under the judgment.”

Mr. Hapa submitted that the nature of the claims in HCSI-CC 83 of 1998 and 89 of 2003 were interrelated in that the parties in the two cases were closely linked. One of the directors in KDCL was also one of the Defendants whilst the others were elders of the Eapa, Gaso and Igolo tribes (see exhibit 2 of Mr. Baekisapa’s affidavit filed 17^th October 2003).

Mr. Hapa also highlighted the similarity of the claims which the Defendants and MCL have as against KDCL. Both relied on the same agreement for their claims save that the cause of action in each case was different. Mr. Hapa contended that MCL was able to off-set the judgment obtained in HCSI-CC 89 of 2003 as against any awards that may be made against them in HCSI-CC 83 of 1998 and extinguish it.

Mr. Upwe for the Defendants on the other hand submits that the circumstances described above do not qualify as special circumstances.

I am satisfied this court has power to order a stay of the judgment where special circumstances permit under Order 45 rule 19 of the Rules. The issue for determination before this court is whether the circumstances described above comprise special circumstances. In Kenichi Kanna, Akito Kudaka v. National Fisheries Development Limited^[4] (hereinafter referred to as “Kenichi’s Case”) his Lordship Muria C.J. adopted the guidelines in Burnet v. Francis Industries plc (ibid) in assisting him to determine whether a stay should be granted or not. I concur with his Lordship’s approach in Kenichi’s Case that the guidelines propounded by Lord Bingham, which are addressed hereafter, provide useful guidance in determining whether a stay of execution of a judgment should be granted or not.

(a) The nature of the plaintiff’s claim

The Counterclaim of the Defendants as against the Plaintiffs jointly and severally was for damages for trespass into their customary lands and damages for conversion of their trees. MCL’s claim on the other hand against KDCL was based on damages for false representation. The two claims and parties unfortunately are not the same. This is to be contrasted with Kenichi’s Case, in which a stay was ordered by the court of HCSI-CC No. 55 of 1999^[5] by virtue inter alia of the fact that the parties in both cases were the same parties and their respective claims based on the same agreement. In Kenichi’s Case, the value of the claim ($2,576,070-74) of Kenichi Kanna and Akito Kudaka was more than the award ($760,894-00) made in favour of National Fisheries Development Limited in HCSI-CC No. 55 of 1999 so much so, that in the event Kenichi Kanna and Akito Kudaka were to win their case at the end of the day, this would have the effect of either extinguishing or diminishing National Fisheries Development Limited’s claim or judgement. In contrast, any awards made in this case in favour of MCL will have little or no effect against any awards made in favour of the Defendants. The reason being, that MCL’s claim was not taken out against the Defendants but rather against KDCL, which is a different entity entailing separate and distinct liability.

(b) The extent of the identity between the defendant and the other party

The issue regarding the extent of the identity between the “defendants” (in this instant “KDCL and MCL jointly and severally”) and the other party, in this case, MCL, bearing more or less the same identity is that it raises the presumption that MCL’s claim is more or less like a true counterclaim against the Defendants. Unfortunately, that association or link falls apart in this instance. The opposite parties being sued in HCSI-CC 83 of 1998 and HCSI-CC 89 of 2003 are not the same.

(c) The interrelationship of the respective claims by the plaintiff against the defendant and by the other party against the plaintiff

The link also falls apart in terms of the respective claims of the Defendants as against KDCL and MCL on the one part and MCL against KDCL on the other part. Whilst Olupatu Amiki is also one of the directors of KDCL, the Defendants and KDCL are two separate parties or entities. Their respective claims are distinct and separate from one another. No direct link exists apart from the fact that any award of damages which MCL is required to pay to the Defendants may be recoverable from KDCL. The claims of MCL as against KDCL cannot be likened to a true counterclaim against the Defendants.

(d) The strength of the other party’s claim

Further, the fact a judgment in default for unliquidated damages exists in favour of MCL does not raise any requirement or obligation whatsoever on the part of the Defendants to pay MCL anything eventually. Any links therefore between their respective claims and possible counterclaims falls apart.

Quaere, it would seem that enforcement proceedings undertaken in respect of HCSI-CC No. 83 of 1998 by the Defendants had been acted upon prematurely in that no assessment for damages has yet been conducted. I had directed in paragraphs 6 and 7 of the Orders of this Court dated 7^th March 2003 that damages be assessed for trespass and conversion of logs. Unfortunately there is no evidence to suggest that any such assessment had been carried out or in lieu thereof an order by consent for damages. No enforcement proceedings therefore should have been commenced in this case.

(e) The size of the other party’s claim relative to the plaintiff’s.

At this point of time, the size of the Defendants’ claim remains unknown as opposed to the size of MCL’s claim though I would expect the Defendants’ claim to be greater than MCL’s claim. Whatever the size of their respective claims it makes little difference to the rights of the Defendants to enforce their judgment against MCL and KDCL. This matter would have been relevant if the Defendants would have been required to off-set any claims that MCL have as against KDCL. Unfortunately that does not apply in this instance.

(f) The likely delay before the merits of the other party’s claim against the plaintiff would be decided.

The question of delay in respect of the merits of MCL’s claim as against KDCL would have been relevant if KDCL and the Defendants were more or less of the same identity. Unfortunately they are not and makes little difference to the fact that MCL already has a judgment in its favour as against KDCL.

(g) The extent of the prejudice to the plaintiff if he was denied the fruits of his judgment until the other party’s claim was determined.

On the extent of prejudice which might be caused to the Defendants if they are denied the fruits of their judgment pending assessment of MCL’s claim, the distinction to be noted is that the claim of the Defendants is not going to be affected by MCL’s claim against KDCL. Any quantum of damages awarded in favour of MCL is not going to affect whether directly or not the Defendants’ claim in HCSI-CC 83 of 1998. It is not going to extinguish the Defendants claim in HCSI-CC 83 of 1998. All it means is that MCL may be able to recover any awards made against it in that case from KDCL but that does not prevent the Defendants from pursuing their judgment against MCL and KDCL.

(h) The risk of prejudice to the other party if the defendant were to make payment to the plaintiff under the judgment.

The question of risk of prejudice to MCL arises from the presumption that should payment be made to the Defendants in this case that MCL may not be able to recover its judgment sum in HCSI-CC 89 of 2003. Unfortunately, such risk does not arise in this case in that the Defendants were not a party to HCSI-CC 89 of 2003. They are not liable or obliged therefore in any way to MCL for its judgment sum against KDCL.

Decision

In the circumstances, I am not satisfied a stay should be granted.

Orders of the Court:

1. Refuse application for stay.
   
2. Costs of the Defendants to be borne by the second Plaintiff.
   

THE COURT.

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^[1] HCSI-CC No. 83 of 1998, 7^th March 2003
^[2] HCSI-CC No. 89 of 2003, 1^st July 2003
^[3] [1987] 2 All ER 323 per Bingham LJ at 329-330 and Headnote at 323
^[4] unreported HCSI-CC No. 33 of 1999, 18^th January 2001
^[5] National Fisheries Development Limited v. Kenichi Kanna, Akito Kudaka, 9^th November 1999