Ikau v Tahia [2017] SBMC 20; Civil Case 73 of 2016 (10 February 2017)

IN THE CENTRAL MAGISTRATE’S COURT )
OF SOLOMON ISLANDS )
Civil Jurisdiction

Civil Case No. 73 of 2016

BETWEEN: MICHAEL IKAU CLAIMANT

AND: ABRAHAM TAHIA FIRST DEFENDANT

AND: DON HOUKURA SECOND DEFENDANT

AND: STEVE HOUALEA THIRD DEFENDANT

Date of Hearing: 9^th December 2016
Date of Ruling: 10^th February 2017

Ms. Cathy Hite for the Claimant
All Defendants self-represented

RULING ON APPLICATION TO STRIKE OUT CLAIM

Introduction

1. In this application, Abraham Tahia, Don Houkura and Steve Houalea (“Defendants”) applied to strike out the claim on the basis that they are not the right persons to be sued and therefore, the Court should strike out the claim filed against them.
   
2. In support of their application, the Defendants relied on a joint statement of defence filed on 3^rd June 2016, a sworn statement of the Second Defendant filed on 15^th September 2016 and their joint written submission filed on 14^th September 2016.
   

Facts of the case

3. During 2013, Koloale Secondary School was said to face with financial difficulties to keep the school and its administration going due to non or late payment of the annual school grant. This resulted in the School desperately in need of finance and hence, it has to look for other sources of funding to finance its operation and affairs pending the receipt of the said school grant.
   
4. Having caught up in that unfortunate situation, Steve Houalea, being the School Principal of that school and the Third Defendant in this matter, contacted the First Defendant and Second Defendant for any funding for the school. He preferred to contact them since they were his superiors and respectively held senior administrative positions at the Honiara City Council Education Office in Honiara.
   
5. During that year, the First Defendant worked as a Senior School Inspector Primary whilst the Second Defendant was the Chief Education Officer. By virtue of their positions, they were considered as Senior Education Administrators responsible for the administration of all schools within the Honiara City Council.
   
6. As a result of the Third Defendant’s request, the First and Second Defendant contacted Michael Ikau (“Claimant”) if he has any fund to lend with interest and that the Koloale School would refund it later when the school grant is available. The Claimant responded agreed to the proposal and an arrangement was made for him to meet with the Third Defendant purposely to give the money.
   
7. The Third Defendant went to the Claimant, collected $24,000 and in return gave two school cheques to him as securities regarding their agreement. A verbal agreement was reached that an interest of $11,000 would be added to the borrowed principal amount when the debt is repaid.

8. Despite that unequivocal agreement, the Defendants since 2013 have failed to pay the total debt as promised. Despite an issuance of 14 days’ notice for repayment of the debt, no positive response was forthcoming. To make matters worse, the cheques issued as securities to the Claimant were dishonoured when they were presented at the bank.
   
9. The Claimant suffered loss from the use and benefit of the money. Rather than to wait for an indefinite period for repayment of the money, he decided and eventually lodge this claim.
   
10. The matter proceeded in Court and after being served with the claim, the Defendants filed a joint submission to strike out the claim on the basis as aforementioned, that the Claimant had erroneously instituted this proceeding against them and in their collective views, the right party to be sued should be the School Administration of the Koloale Community High School.
    

Law on application to strike out claim

11. In our jurisdiction, an application to strike out claim falls under rule 9.75.^[1] The Court has the discretion to grant the application. Accordingly, it requires the applicant(s) to prove on the balance of probability the claim is frivolous and vexatious, it has no reasonable cause of action and it is an abuse of Court or legal process. Once the Court is satisfied on those grounds then, it can exercise its powers to strike out a claim.
    
12. Beside the legislation, the Court also explained the principle governing the application to strike out claim and now part of our judicial precedent.^[2] In the High Court case of Mane v Evo,^[3] Judge Faukona, explained the application of this law in the following unequivocal terms:
    

“In brief the principle is that to strike out a claim the Court may do so in exceptional cases only where it is shown that there is no reasonable cause of action. Even if leave is granted for amendment such would not cure the defects. If pleadings or statement show some essential facts which disclose some cause of action or raise question fit to be considered, the Court should not strike out the pleading or statement of claim. Even if the case is weak and likely not to succeed, that is no ground to strike out.”^[4]

13. The principle outlined out in Mane’s case reveals the following points that need to be kept in mind when dealing with an application to strike out a claim:
    

13.1 First, the Court will only grant the application when there is no reasonable cause of action even if leave is granted for amendment of the claim. This means that if the claim is defective in form or substance but can be cured or perfected by leave of the Court then, the claim must not be prematurely terminated or strike out.

13.2 Second, if there are some facts which show some cause of action in the claim, the Court must not strike out the case. This simply connotes that the Court will still be satisfied that there is cause of action even if there are some facts in the pleadings. The word “some facts” in light of Mane’s case must mean some facts in the literal sense and not all of the facts when considering whether or not to strike out the claim.

13.3 Third, the Court at the hearing of the application for strike out a claim should not assess the strength of the case if it is satisfied that there is a cause of action disclosed in the pleadings. The strength of the case is irrelevant to consider at this stage if a cause of action is clearly established. The strength of the case and issues about the prospect of succeeding are issues that ought to be canvassed or dealt with at later proceedings.

14. Having acquainted with the law on this application, I now turn to the merit of the application to determine whether or not it should be granted.
    

Defendants’ case

15. The ground of instituting the claim against the wrong persons as relied on by the Defendants may be considered or fall under the category commonly referred to as ‘claim that does not have any cause of action’ as provided for under rule 9.75(b).^[5] It may well be also considered as a claim that is frivolous and vexatious as encapsulated under rule 9.75(a).^[6]
    
16. The Defendants strenuously maintained that they are not responsible to pay the debt and that persons apart from them should be responsible for the debt. To put it in more detail way, the Defendants averred that they are innocent of the allegation since the School Administration of Koloale Community High School is the beneficiary of the money and hence, it should be the rightful body to be sued and not them. Therefore, the claim filed against them is baseless in law and fact.
    

Reasons

17. I think the issues raise in the application can be easily dealt with. The materials disclosed in the claim showed that in 2013, the First and Second Defendant had made arrangement with the Third Defendant to borrow funds from the Claimant purportedly for financing of the Koloale Community High School. They collectively participated in a formation of an arrangement for the Third Defendant to borrow money from the Claimant which they successfully did. There is no dispute that as a result of their collective arrangement and agreement, the Claimant gave $24,000 to the Third Defendant chargeable with an interest of $11,000. When their various conducts are examined, it is very clear that the First and Second Defendant had played active roles in aiding or facilitating the Third Defendant to obtain the money from the Claimant. This finding was supported by their own admissions at paragraphs 3 and 4 of their joint written submission.^[7] Further, they had also collectively participated in assuring the Claimant that the borrowed $24,000 will be repaid with interest once the school grant is available. This has not been performed by the Defendants resulting in the Claimant suffered loss from the use and benefit of his money.
    
18. In my view, their collective conducts leading up to the agreement and the eventual lending of the money makes them privy to the agreement and hence, they are parties to it since the agreement only borne out of their collective conducts and consensus. They have made an express undertaking or promise which they failed to perform till date. These sequence of actions performed by the Defendants has been pleaded in the claim which I take cognisance of. Issues about who benefitted and so forth are matters that are to be canvassed at later proceedings save to say that at this stage, the Court will only look at the pleadings whether there is a cause of action against the Defendants .
    
19. Central to the issue of who are the beneficiaries of the borrowed money and whether or not the Defendants are erroneously named as parties to this proceeding, the Court was directed to consider the content of a letter dated 1/11/2016 written by Mr. Paul Inifiri from the Legal Office of Honiara City Council. That letter clarified whether or not the Koloale Community High School has benefitted from the borrowed money and whether or not it should be a party to the proceeding in the following manner:
    

“Date: 1/1/2016

From: Honiara City Council Legal Office

Honiara

Senior Legal Officer

Public Solicitor’s Office

P.O. Box 553,

Honiara

Attention Cathy Hite

Dear Ms. Hite

Re: The Decision of the meeting held in our legal office with the Principal and chairman of the Koloale Community High School

I wish to inform you on the decision of the meeting held in our legal office on Monday 24 October, 2016 with the Principal and Chairman of the Koloale Community High School.

1. That during our discussion, we talked on whether the money borrowed from your client has been received and benefitted the Koloale Community High School.
   
2. That both the Principal and the Chairman has informed and denied that the Koloale Community High School did not at any time received the borrowed money into the School Account nor was the School benefitted from that borrowed amount of $35,000.00
   
3. That the Koloale School is solely own by Honiara City Council.
   
4. That in order for a borrowing of money is legal for any school under the Honiara City Council, only the Honiara City Council as the responsible authority for Koloale Community High School has a legal power to borrow the money for the school.
   
5. That the three defendants Abraham Tahia, Don Houkura and Steven Houalea mentioned in the present suit by your client at no time the Honiara City Council has authorised them to borrow the money from your client for the Koloale High School.
   
6. In relying on the grounds above, the Principal and the Chairman of Koloale High School plus our legal office has decided that the Koloale High School is not a party to this matter.
   

Our legal office has advised that the Koloale Community High School must not be included in this suit made by your client. Thank you for your understanding.

Yours faithfully,

Paul Inifiri

HCC Legal Office”^[8]

20. The evidence revealed in the letter is self-explanatory and with interest, disclosed the alleged procedural impropriety on how the Defendants had requested the funds. It also explained whether or not the Koloale School has benefitted at all from the funds obtained from the Claimant. Further, it did not only contain the views expressed by the current Administration of the Koloale Community High School regarding whether or not it should be a party to the current suit but, it conveniently assist the Court to ascertain the respective standings of the Defendants to the current claim.
    
21. I take cognisance of the fact that the money was borrowed three years ago and the school grant normally came in two tranches annually. If the request was mandated by the Koloale School Administration and formally approved by the executive body of the Honiara City Council Education Office, I find it hard to comprehend why it has taken so long for the Koloale School or even the Honiara City Council Education Office to repay it until date. If the delay for the repayment of the debt is still pending receipt of the awaited school grant, then, I am surprised why the said School is still functioning taken into account it has been financially crippled since 2013. If the borrowing was in fact sanctioned by the Koloale School Board or the executive body of the Honiara City Council Education, then it should have been easily deducted already from the past annual school grants to avoid the school incurring liability and subject to any possible lawsuit. The delay or failure to repay the money must lie somewhere and this must be investigated at trial to uncover such impropriety.
    

Decision/Orders

22. I have considered the merit of this application and regrettably, I am not persuaded or convinced with the materials and arguments advanced by the Defendants that the claim against them be struck off. I do not see any problem at this stage that they are erroneously or improperly sued in this proceeding. The current parties to this case are proper and necessary at this stage for the Court to make a fair and just decision regarding who should incur liability to the claim at the end of the day.
    
23. However, what transpired herein is, I am instead satisfied that there is a cause of action disclosed in the pleadings against each of the Defendants. For avoidance of doubt, the terminology ‘cause of action’ in the famous common law case of Read v Brown^[9] means “every fact which it would be necessary for the claimant to prove, if traversed, in order to support his right to the remedy sought. It does not compromise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved”. Applying this definition to the present case, the cause of action that is established in the present case is the violation of the Claimant’s right to the use and benefit of his money ($35,000 inclusive of interest) due to the failure of the Defendants to honor or perform what they had expressly promised in the verbal agreement. Consequent of this, the Claimant then filed the matter to seek redress or remedy against the Defendants.
    
24. Having accepted that there is a cause of action against the Defendants, I am bound by the authorities not to prematurely terminate this case at this stage but must allow it for full determination or to be argued at trial.
    
25. It follows therefore that the reasons reached herein are sufficient to conclude that this application must be dismissed forthwith.
    
26. Each party to bear its own costs.
    

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(Augustine Aulanga – Principal Magistrate)

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^[1] Solomon Islands Courts (Civil Procedure) Rules 2007
^[2] See Abe v Minister of Finance and Attorney-General HC Civil Case No. 197 of 1994, Tikani v Motui (2001) SBHC; HC-CC 29 of 2001 (25 October 2001)
^[3] [2015] SBHC 7; HCSI-CC 414 of 2012 (3 March 2015)
^[4] At paragraph 13 of his Lordship’s judgment
^[5] Solomon Islands Courts (Civil Procedure) Rules 2007
^[6] I bid
^[7] “3. The First and Second Defendants only stepped in to assist the third Defendant and the Claimant so that the third Defendant at that time can borrow funds from the Claimant since he used to lend money with interest to schools.
4. The First and Second Defendants only stepped to assist the third Defendant because the school at that time is in need for money to keep the school and the administration going since the school grant is not forthcoming as expected.”

^[8] This letter was extracted from Annexure 2 of the sworn statement of Michael Ikau filed on 9^th December 2016
^[9] [1888] UKLawRpKQB 186; (1888) 22 QBD 128