Olson v Solomon Time Ltd [2012] SBHC 97; HCSI CC 417 of 2006 (29 August 2012)

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

Civil Case No. 417 of 2006.

BETWEEN:

WILLIAM FREDERICK OLSON
First Enforcement Creditor

AND:

GLORIA OLSSON
Second Enforcement Creditor

AND:

SOLOMON TIME LIMITED(In Liquidation)
Enforcement Debtor

AND:

PAMELA LORRAINED KIMBERLY
First Respondent

AND:

ISLAND GOLD LIMITED
Second Respondent

AND:

TAVANIPUPU ISLANDS RESORT
LIMITED
Third Respondent.

Date of Hearing: 1st August, 2012.
Date of Ruling: 29th August, 2012.

Mr G. Suri for the Enforcement Creditors
Mr D. Marahare for the Respondents.

RULING.

Faukona J: There are three applications on foot. By consent of Counsels this Court will hear the application for stay and defer the other two for a later date.

2. This application was filed on behalf of the Respondents on 30th July, 2012. The Applicants/Respondents sought a number of orders as follows:

(1) An order for a stay of all proceedings pending determination of the Application for leave to appeal from the oral ruling of Chetwynd J on 18th April, 2012, on the application of the Applicants dated 27th January 2012 and subsequent order of Chetwynd J sealed and perfected on 19th April, 2012, filed on 2nd May, 2012 in Civil Appeal No.12 of 2012 and, if leave to appeal is allowed, the Appeal.

(2) Consequent upon order (1), the two application filed on behalf of the enforcement creditors namely application for disclosure of documents and application for seizure of documents filed on 31st May, and 13th July, 2012 respectively and returnable 9:30 am on 1st August 2012, be stayed.

(3) Costs be cost in the cause.

(4) Such further or other order this Court may deems meet.

3. In support of this application are sworn statements of Mr D. Marahare and Mr John Sullivan filed on 31st July, 2012, respectively.

Some background history of this case:

4. This action was commenced by the first and second Enforcement creditors in 2006. On 6th November 2009, the High Court delivered its Judgment and perfected on 10th December, 2009. On appeal the Court of Appeal dismissed the appeal on 25th May, 2010. An enforcement order was made on 6th July, 2010 authorising the Sheriff to recover the sum of $995,000.00 plus costs and interest. On 7th December 2011, Chetwynd J made an order joining the 2nd and 3rd Respondents, which was perfected on 9th December, 2011.

5. On 27th January, 2012 the Respondents applied to have paragraph 4 of the order be vacated in lieu thereof and that the proceedings against the Respondents proceed by way of trial on pleadings with directions for the filing and service of those pleadings. On 18th April, 2012, Chetwynd J refused the application for vacation of the order in paragraph 4 in its entirety.

6. As a result of Chetwynd J's refusal the Respondents filed in the Court of Appeal an application for leave to appeal from his Lordship's ruling. That application for leave to appeal was considered by Chetwynd J (sitting as a single judge of the Court of Appeal) on 22 June 2012. His Lordship refused leave to appeal.

7. The Respondent's Counsel then wrote to the Registrar requesting referral of the application for leave to appeal for determination by the full Court of Appeal in its next sitting. The full Court of Appeal is yet to determine the Application for leaved to appeal and if leave is allowed, the appeal at its next sitting.

8. Rule 17.77 provides for making of an application for a stay. Rule 17.78 provides that the Court has power on application of this nature whether to grant or dismiss the application. It suggests that there is no limitation upon the discretionary power of the Court. However, the applicant must demonstrate a reason or an appropriate case to warrant the exercise of the discretion in his favour.

9. Mr Marahare submits by acknowledging that the institution of the appeal does not operate as a stay of enforcement of that judgment or order. A litigant is entitled to the fruits of his judgment[1]. Against that must be balanced that an appeal if successful should not be rendered nugatory[2]. To suspend the rights of a successful party to collect on his judgment require sound reasons to justify an order by the Court.

10. In amplifying the rationale behind this application subject to Appeal, was to ensure that the Enforcement Creditors plead precisely the facts relied upon to show a cause of action arising under paragraphs 21 and 22 of the Seventh Schedule to the companies (Insolvency and Receivership) Act 2009. The Respondents will suffer a substantial injustice and foot unnecessary costs if this matter is allowed to proceed before the Appeal is determined.

11. Among other things the Respondents will suffer substantial injustice if no proper pleadings been done, in particular, that the Respondents have never was related to the Enforcement Creditors and it is entitled to know by proper pleading. The requirement for Enforcement Creditors' case be pleaded is even more necessary given the claim to a tracing entitlement. That is new and must be pleaded.

12. Mr Suri's major contention is by virtue of the judgment in Islands Construction Management Ltd that the application for stay should be made to the Registrar of the Court of Appeal pursuant to Rule 11 (1) of the Court of Appeal Rules.

13. Further submits that the Respondent's contention that they have the right to respond by pleading and not by sworn statement is misconceived. This case has reached enforcement stage under schedule 7 of Companies (Insolvency and Receivership) Act 2009.

14. Mr Suri also raises and refers to material that indicates liability by the Respondents.

15. I noted the principles lay down by Palmer J as guideline in Kololeana Dev. Co. and Mega Corp Ltd v Olupatu[3]. However, this case is a simple one. The reason is that if the Appeal is allowed then the issues related to the right to respond by pleading because of new matter has arisen which are not raised before, and the injustices that will follow be argued.

16. Meantime no one will pre-empt what the Court of Appeal's decision be. However, the Respondents are adamant that the Application have a good prospect of success.
17. Returning to the crux of Mr. Suri's argument, it is significant that the Rules of Court provides guidelines ensuring justice is done to all parties in litigation. On the other hand case law set precedent to abide with. In this case Rule 11 (1) of the court of Appeal Rules expressly stated that at any time after filing of the notice of appeal or applications any party may apply to the Registrar to impose such special conditions precedent and one of them is for staying of execution.

18. The Rule has further amplified by Palmer J in Island Construction Management Ltd V Air Transport Ltd[4] in which he said,

"In my respective view, a stay of execution obtain from this Court is useful only in so far as an appeal is yet to be lodged. Once an appeal is filed, the specific provisions of the Court of Appeal Rules come into play, otherwise their existence would be meaningless"

19. In this case an appeal has been filed and Rule 11 of the Court of Appeal Rules should automatically come to play. Except as far as otherwise ordered under the Court of appeal Rules or by the Court or a judge an appeal shall not operate as a stay of executing or stay of proceedings pursuant to a decision of the High court and no act or proceeding shall be invalidated by an appeal.

20. In my respective view the Respondents have failed to comply with the Rules. Although this Court has inherent powers the above case has set a boundary, the law has to abide with.

21. With those I dismiss the application for stay.

Orders of Court.

1. Application for stay dismissed.

2. Cost of this application be borne by the Respondents to be taxed
if not agreed.

The Court.

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^[1] Tori v Morris (2001) SBHC 39 at P.4.
^[2] J.C Scott Construction V Mermaid Waters Tavern Pty Ltd 9 No. 1(1983) 2Od, R. 243 at 247 A, B; Russel Islands Plantation Estate Ltd V Solomon Islands National Union of Workers (2011) 99; HCSI – CC 247 of 2011 (27 September, 2011.
^[3] [2003] SBHC 77.
^[4] [1999] SBHC 22.