Russel Island Plantation Estates Ltd v Solomon Islands National Union of Workers [2011] SBHC 99; HCSI-CC 247 of 2011 (27 September 2011)

IN THE HIGH COURT OF SOLOMON ISLANDS.
(Faukona, J).

Civil Case No. 247 of 2004.

BETWEEN:

RUSSELL ISLANDS PLANTATION
ESTATES Ltd.
Claimant

AND:

SOLOMON ISLANDS NATIONAL UNION
OF WORKERS.
First Defendant

AND:

WILLIAM TOKASI, JOHN JULY, SOLU
KOSU, CLAUDIUS KABASI, JOHN MAE,
AVRIL HAKA, JOHN PUENOILA,
STEPHEN NAGWA, BRADDLEY KONARI,
JOHN WEO, ISSAC TALO, ASHLEY MANDANI,
JACK AKWASABIE, JOHNMARK MANI,
ERICK HOU, JOHN UINIU, JEWS ASINAMO,
CHARLES PETER, HENRY APATO, NELSON
RIKI (as leading striking employees).
Second Defendant

Date of Hearing: 22nd September 2011.
Date of Ruling: 29th September 2011.

Mr. J. Katahanas for the Claimant/Respondent.
Mr. D. Marahare for the 1st and 2nd Defendants/Applicants.

RULING ON APPLICATION TO STAY ENFORCEMENT PROCEEDINGS.

Faukona, J: This application was filed on 4th August 2011 to stay enforcement proceedings pending the hearing and determination of an appeal filed by the Defendants on 20th April 2011 to the Court of Appeal.

2. For the purposes of ease of reference the Claimant/Respondent is herein named as "enforcement creditor" and the Respondents/Applicants is herein named as "enforcement debtors".

3. The grounds bearing the weight of this application is premised on the fact that there is a pending appeal in the Court of Appeal, and secondly, there is a challenge to the power of the High Court to assess damages whilst it was yet to hear and determine the application to set aside orders upon which the assessment of damages was based. The challenge in fact is a matter for the Court of Appeal.

Chronology of events outline:

4 It is significant to outline the chronology of events in this case. On 6th October 2004 Brown J, in his judgment found the enforcement debtors were conducting an illegal strike, therefore granted injunction restraining the same, and ordered enforcement debtors to pay damages to the enforcement creditors to be assessed.

5. On 14th October 2004, the enforcement debtors filed an application to set aside the orders of 6th October 2004. On 17th November 2004, the application was refused. The enforcement debtors then appealed against the High Court ruling on 17th November 2004 to the Court of Appeal.

6. On 27th July 2005, the Court of Appeal declared that the trial judge has power to vary order on 7th October 2004; refused to vary the existing injunction and remitted the matter to the High Court for further consideration. The orders were perfected on 30th May 2007.

7. On 2nd September 2009 the enforcement creditor filed an application for orders that the enforcement debtors application filed on 14th October 2004 be struck out for want of prosecution and failure to comply, and for assessment of damages.

8. Following the filing of the enforcement creditor's application, there were four adjournment hearings. In between, orders for directions were made which the enforcement debtors filed sworn statements on 25th June 2010 from Fisher Young Lulu and Reginald Kokili. Further sworn statement was filed by Tony Kogovai on 21st July 2010.

9. On 23rd July 2010 the Court ordered parties in consultation to compile a trial Book which eventually was done.

10. On 8th November 2010 assessment of damages hearing was conducted and a ruling was made on 21st March 2011. On 24th March 2011 a letter of demand was sent to the enforcement debtors threatening enforcement proceedings. On 20th April 2011 the enforcement debtors filed notice of appeal against the ruling of 21st march 2011.

11. On 30th June 2011 enforcement creditor filed a request for enforcement order which was issued on 18th July 2011. On 21st July 2011 enforcement order was served on Crystal lawyers and on 29th July 2011 the same orders were served on first enforcement debtor's officers. On 14th August 2011 enforcement debtors file this application for stay.

12. Initially I have stated that there is but one ground upon which Mr Marahare relies on in advancing this application.

The pending appeal:

13. It is a non-contentious issue that there is an appeal pending hearing and determination by the Court of Appeal. Mr Marahare submits that whilst the appeal is pending, it guarantees a valid reason to apply to stay enforcement proceedings.

14. This application is supported by Mrs. Bird's sworn statement filed on 4th August 2011. Paragraphs 2-6 of the statement are a replica of the statement of case. In fact the entire statement is confined to some facts, supportive in nature, to the two grounds of appeal in the notice of appeal. There is no other ground raise for the grant of stay. I'm afraid, quite frankly, and conscious not to encroach into another realm to acclaim powers that may deemed as usurping the authority of another. Quite mindful of this instinct, though there is an authority providing reasonable assessment of the ground of appeal if a stay has to be granted. However, I am urged with some reluctance, to determine not to the fullest, but some issues related to the ground of appeal and allow the rest be dealt with by the rightful institution.

15. There are two approaches in this case. Mr Marahare's approach is limited to the application for stay supported by a pending appeal to the court of Appeal. He refers to two authorities which I will discuss later. Mr. Katahanas present a balance situation that a successful litigant is entitled to the fruits of his judgment, against the principle that an appeal, if successful, should not be rendered without value.

16. Chronology reveals that on 6th October 2004 the Court ordered the enforcement debtors to compensate the enforcement creditor for its losses, to be assessed. Six and half years after the damages were awarded; the assessment was finally done on 21st March 2011. The manner and the rate this case progress has been at a slow pace, and is contemplated that be maintained for some time more into the future. It has almost a decade since the inception of this case. To continue prolong the fundamental right of a successful party to enjoy the fruit of his judgment require sound reason to justify an order for stay. The case of J.C. Scott Construction v Mermaid Waters Tavern Pty-Ltd (No.1)[1] in which the Court reminded that there must be facts to justify the stay; reference to paragraphs E and F;

"I think the decision cited show that under the exception there is a general discretion reposed in the Court. But in the exercise in that discretion one has to bear in mind that the rule is that there shall be no stay. The facts must justify the stay".

17. This principle was adopted in Tori v Morris under the old high Court Rules where Kabui, J refer to Halsbury's Laws on page 5 paragraph 2. Under the new Rules, Rule 17. 77 the exercise of discretion is unlimited and does not require special circumstances. However there has to be facts to provide the court exercise its discretion.

18. The crevices of this application demised on two allegations; that the High Court failed to direct further hearing as ordered by the Court of Appeal. Secondly that the High Court error in not determining the application to set aside before the assessment of damages. It is not easy and simple enough to say the judgment appeal from is wrong or not wrong. In this case the enforcement creditor commence with the presumption that the judgment is correct, so decided to take steps to advance its case. In Starborne Holding Pty Ltd v Rodferry Pty Ltd and Ors[2] stated on page 4;

"An appeal to the court shall not operate as a stay of execution or of proceedings under the judgment appeal from; or except so far the Court or a Judge or the Court below may direct".

And on the same page last paragraph the Court continued;

"Where an application is made for a stay of proceedings, it is necessary that the applicant demonstrate an appropriate case. Prima facie, a successful party is entitled to the benefit of the judgment obtained by him and is entitled to commence with the presumption that the judgment is correct. These are not matters of rigid principle and a Court asked to grant stay will consider each case on its merits, but where an applicant for a stay has not demonstrated an appropriate case but has left the situation in the state of speculation or of mere argument, weight must be given to the fact that the judgment below has been in favour of the other party".

19. After the Court of Appeal orders, the enforcement debtors by their conduct did nothing to advance their purported pending application. Without further waiting in suspense, the enforcement creditor, as a successful party, and who is entitled to the benefit of the judgment; filed a case including an application to struck out and for assessment of damages, which eventually a ruling was made to the effect in its favour. He commenced with the presumption that the judgment is correct; and that is within the bounds of law.

The issue of prospect of success in the appeal:

20. The prospect of success in the appeal is one of the issues to be considered on the application for stay. It may be perceived as presumptive at this stage; and places me in a difficult position. However, I'd rather assume than deciding. The main focus of the appeal pivoted on the allegation that the High Court was erroneous in not directing a hearing of an application to set aside before the assessment of damages. It has to be noted that four years has lapsed which the enforcement debtors sat on the orders with no initiative or respond to advance their case until 2nd September 2009 when the enforcement creditor filed application to struck out the enforcement debtor's application for want to prosecution. Rule 9.72 makes it plainly clear that the Court may strike out a proceeding without notice, if there has been no step taken in the proceeding for 12 months. Four years is more than enough to suggest the prospect of success in the appeal cannot be guaranteed. In the case of Park and Anor v Brothers[3] the Court has a clear stand on this point; paragraph 9 states;

"Any judge who is asked to make a decision on a stay pending appeal should take into account the prospect of success in the appeal. When it is the judge who is asked to grant the stay, this places him or her into a difficult situation. I prefer to approach the matter by assuming, without deciding, that there are some prospects of success in an appeal against my judgment. I do this because having to form a view about the prospect of such an appeal is an intellectual task while I am particularly unfit to perform, because I come to it with a considered predisposition that my decision is right. The absence of any grounds of appeal makes the task of deciding prospect of success on an appeal even harder."

21. From the statement of case and Ms Bird's sworn statement, it appears obvious that the High Court was blamed for being irresponsible for not directing further hearing of the application to set aside. Upon reading of the perfected orders of the Court of Appeal, it says, that this matter is remitted to High Court for further consideration..." There are varying versions of what the Court of Appeal meant. In my respectable view, a claimant or applicant who has a pending case in Court, by normal practice, carry the onus ensuring its case is listed for hearing, guided by Rule 9.72 above. Any order for a retrial or rehearing, by itself does not displace Rule 9.72, or over take the practice governing such proceedings. Since the Court of Appeal made its ruling the enforcement debtors did not at any stage seek to have their own application set down for hearing. Mr Marahare admits that the Counsel on record is partly to be blamed for not prosecuting their application. In the case of Quarter Enterprises Pty Limited and Ronald Harry Gibbs v Allardyce Lumber Co. Ltd and John Henry Beverly[4] the Court affirms the responsibility of a party who obtains an order for a new trial. The Appeal Court said on paragraph 31;

"There is another and we suspect not unrelated complaint in Ground 9, which is that Goldsbrough, J had not paid sufficient regard to the direction of the Court of Appeal that the action should be retried. It is difficult to believe that the learned Judge could or could have over looked that part of the order of the Court of Appeal; but Grounds may be attempting to suggest that, once a new trial has been ordered by the Court of Appeal, it is not within the authority or jurisdiction of a primary judge to dismiss the proceedings for want of prosecution. If that is what underlies Ground 9, then it is plainly mistaken. While it is true that, as was said in Roe v Nylon Ltd (supra), a new trial supersedes the first trial, it does not follow that an order for retrial by itself operates to displace the ordinary Rules of Court in Civil Proceedings or to overtake the practice governing such proceedings. Hence, for example, where the party who obtained an order for a new trial fail to proceed with it, the remedy is by application to dismiss made to a single judge of the High Court and not to the Court of Appeal, which in general has no original jurisdiction to dismiss the action for want of prosecution"

21. This is exactly what the enforcement creditor did after waiting for almost five years; file an application to struck out the enforcement debtors pending application. Eventually Goldsbrough J determined among other things the value of damages. To blame the court for not directing a further hearing which resulted in delay is a misconceive perception. In the case of J.C Scott Construction. v Mermaid Waters Tavern P/L (No.1)[5] at page 253, paragraph A, the Court stated;

"Should I be wrong in this conclusion, and having regard to the very wide nature of the discretion referred to by the Court of Appeal in Attorney-General v Emerson (supra), I would not be prepared to exercise the discretion in favour of the defendant in this case. All of the materials show that the defendant's situation is due to its conduct. It has not complied with the Court Orders and was not prepared to litigate its defence when it should have been in the position to do so".

22. There were three issues brought to Court on 18th November 2010. That substantially shakes the enforcement debtors out of their slumber, waken to realise that there was an application to struck out the application to set aside for want of prosecution and assessment of damages. The difficulties the enforcement debtors confronted after the ruling on 6th October 2004 was due to their own conduct. They had failed to comply with the Court orders, and not prepared to litigate their case. They seemed to rely on court to initiate and direct further hearing, a responsibility vested on them which they tend to ignore.

Financial capability and prejudice:

23. Mr Marahare submits that the enforcement creditor will experience no prejudicial effect should the stay be granted. He affirms he will pursue the appeal to be heard in the coming Court of Appeal session in November 2011. Further to that he is concerned that the enforcement creditor has lodged and a caveat against enforcement debtors fixed term estate in PN191-023-179. Mr Marahare submits that even if the parties have to wait until the actual hearing of the appeal the interest of the enforcement creditor is well protected.

24. Mr. Katahanas in reply rebuked such submission, and submits that there is no evidence at all by way of sworn statement filed in this Court which goes to the financial position of the enforcement debtors, or which shows any prejudice or harm to the enforcement creditor. There is no tangible security offered or a guarantee from the bank to secure their position, should their appeal fail.

25. In the case of J.C. Scott Construction v Mermaid Waters Tavern P/L (No.2)[6] Derrington, J said on paragraphs B, C and D;

While not providing any evidence that a stay would not harm the respondent by reason of any state of the applicant's own financial affairs, the applicant claimed that the financial state of the respondent was such to cause apprehension that a successful appeal would find the applicant benefit of any chance of recovering monies paid under the judgment. This is said to be good reason for a stay. While agreeing with the principle, I can see no satisfactory evidence to provide the necessary factual base to apply it. The onus is on the applicant, who must come armed with material. The financial stability of the respondent is not shown to be insecure and undertakings will be given as to retention of present ownership. In the absence of any other reason, the application must fail where it relies upon the existence of an appeal".

26. Indeed there is no evidence at all provided in regards to the financial stability of the enforcement debtors, or provision of any security whatsoever, or undertaking that they currently retain ownership of. In the absence of such, it cannot rely upon the existence of a pending appeal as a reasonable cause to stay.

27. In J.C Scott case (No 1)[7] refer to above, Master Lee Q.C stated on paragraph B and C;

"There is no affidavit which goes to the financial position of the plaintiff or which shows any prejudice or harm to the defendant. There are commercial means available to a defendant of search and inquiry. I am quite unable to infer from His Honour's reasons that His Honour in any way concluded that the plaintiff was in any position of financial difficulty. Accordingly, in the absence of evidence of prejudice, which Isaacs J said was "one essential". I adopt the statement of Bowen L.J. in The Annot Lyle (supra) at page 116 that, in the absence of an affidavit, the Court must assume that if the money is paid over to the plaintiff and the appeal is successful, the defendant will be able to get it back".

28. The principle in this cases was adopted by Ward CJ in Islands Enterprises Ltd v Reef Pacific Trading Ltd[8] where he stated on page 3 paragraph 7 and 9;

"Any such application must be supported by affidavit and, on the grounds of inability to pay, set out the applicant's income, the nature and value of any of his property and the amount of any other of his liabilities. I have no such evidence on which to be satisfied in this case except that I have knowledge that a Receiver was appointed and has since been removed".

"The general principle where there is an application for a stay pending appeal is that, when the judgment is for payment of money, it will not be granted unless the appellant is able to produce evidence to show that, if the damages are paid, there is no reasonable possibility of getting them back if the appeal succeeds. No suggestion has been made by the defendant that this is the case. Application for stay of execution is refused"

29. The above cases have said it all. There is no evidence from the enforcement debtors by way of sworn statement to reflect their financial capability and stability; nor is it shown to be insecure. There is no security or any undertakings made by the enforcement debtors. There is no evidence at all to show that if the damages are paid, there is no reasonable possibility of getting them back if the appeal succeeds.

30. Turning to the two cases which Mr Marahare refers to. In Leni's case[9] there were two applications before the Court; one for stay and the other is to set aside default judgment. Counsels have agreed to deal with the setting aside application, and upon successful will automatically affect the application to stay. The Court dealt with Leni's case under Rule 9.52 and having considered the requirements under Rule 9.54 the court is satisfied and henceforth exercises discretion and set aside the default judgment.

31. That case has to be distinguish from this one. In this case the only application before this Court is for stay. The application to set aside has been the centre and subject of an appeal to the Court of Appeal. It has to be noted that different Rules provide for each application. Application for stay is not a straight forward one. It requires certain considerations which the case authorities quoted above advocates and must be supported by evidence.

32. In the case of Earthmovers[10] decided by the Registrar is a classical case where discretion is exercised. Paragraph 4 clearly states that. The judgment came about because of the unless or guillotine order. In paragraph 4 the Registrar has considered the plaintiff will not be unduly prejudiced and there is no likelihood the assets be divested before the appeal was heard. Apparently the Registrar failed to go into depth to see how significant it is to adduce evidence to prove any unduly prejudice, and evidence affirming that the assets be preserved and secured until the appeal was heard. All he was, was presuming things will be ok. That is not good enough. In all, the Registrar decision is not a precedent.

32. Having said that, the case authorities have enlightened the need to be cautious and vigilant when it comes to application for stay. In this case the whole point fails on the central issue. The enforcement debtors come to Court with no evidence at all, and cannot rely on an appeal as the only reason to stay. There is nothing the enforcement creditor to show, the obligation according to authorities rest on the enforcement debtors to make out their case. In this case they failed. I therefore exercise discretion and refused the application.

Orders.

1. Application for stay refused and dismissed accordingly.

2. Matter remitted to the Registrar to re-list the enforcement hearing for examination of the enforcement debtors.

3. Cost of this application be paid by the enforcement debtors to the enforcement creditor.

The Court.

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^[1] [1983] 2 Qd R 243
^[2] [1998]FCA 548 (21 May 1998).
^[3] [2003] NSWSC 1054 911 November 2003).
^[4] [2009] SBCA 15.
^[5] Ibid
^[6] [1983] 2 Qd.R.255
^[7] Ibid
^[8] [1991] SBHC 63; HC-CC 119 of 1990 (12 December 1991).
^[9] [2008]SBHC 110;HCSI-CC 349 of 2007(31 October 2008).
^[10] [2001] SBHC 152; HC-CC 184 of 1998 (29 October 2001).