Gateway Enterprises Ltd v Vaokakala Holdings Ltd [2002] TOSC 23; C 1388 1999 (31 May 2002)

IN THE SUPREME COURT OF TONGA
CIVIL JURISDICTION
NUKU’ALOFA REGISTRY

NO.C.1338/99

BETWEEN:

GATEWAY ENTERPRISES LTD
Plaintiff

AND:

VAO KAKALA HOLDINGS LTD
Defendant

BEFORE THE HON CHIEF JUSTICE WARD

Counsel: Mr. Fakahua for Plaintiff
Mr. Tu’utafaiva for defendants

Date of Hearing in Chambers: 29 May 2002
Date of Ruling: 31 May 2002

RULING

This is a claim for the return or division of partnership assets and monies. It has already involved a series of interlocutory applications and orders and is set for hearing on 3 June 2002.

The plaintiff filed an application on 8 March 2002 for an interim order in relation to a bulldozer which, it was claimed, was being cannibalised by the defendant in order to restore one of its own bulldozers. The court saw the two machines and it was clear that the claim by the plaintiff was true. However, the defendant claims it needs one working bulldozer and this was the better one to repair. The defendant suggests the application to stop it using the bulldozer in which the parts had been fitted was made simply to stop it operating the quarry. It was clear that such an order would have that effect and, on 22 March 2002, I made an Order in the following terms:

1. That the defendant shall supply to the Court and the other parties in the action a list of all parts removed from the bulldozer the subject of his action by 4.00pm on 28 March 2002.
   
2. That the defendant shall provide to the Court and the other parties each fortnight starting on 25 March 2002 a statement of the hours the repaired bulldozer has been used and the quantity of material it has worked in any capacity stated in metric tonnes
   
3. That failure by the defendants to comply with the requirements of paragraphs 1 or 2 of this Order shall result in the defence being struck out and judgment being given to the plaintiff.
   

The terms of the third paragraph resulted from the earlier conduct of the officers of the defendant in which they had failed to comply or to comply fully with Orders of the Court. As a result, the Court considered that there should be a peremptory order.

Since making that Order the defendant has complied as follows:

1. List of parts removed from bulldozer – filed on 26 March 2002.
   
2. Reports on use of bulldozer with the dates on which they were required to be filed in parentheses:
   

(a) 28 March to 10 April – filed 12 April (8 April)

(b) 11 to 24 April – filed 26 April (22 April)

(c) 25 April to 8 May – filed 10 May (6 May)

(d) 9 May to 22 May – filed 28 May (20 May)

The Plaintiff then sought an Order striking out the defence for failure to comply with the terms of paragraph 2 and giving judgment to the plaintiff in accordance with the terms of paragraph 3. This was, Mr Fakahua points out, a peremptory order and it was clear it should be complied with strictly.

In his affidavit in reply, one of the officers of the defendant admits hearing the terms of the Order when it was made but stated he understood it to mean that he had to supply a two weekly report. When he gave his counsel the report of the parts removed, he asked for a copy of the Court Order and was told that his counsel did not have it. The written Order was delivered to counsel on 28 March but the deponent stated he first saw that Order when he was given the papers in the present application to strike out.

Mr Tu’utafaiva asks the Court to consider that the failure was one of degree, in effect, and that no real injustice had been caused to the other party by the delay.

I cannot accept that those are the principal considerations for the court in a case of failure to obey such a court order. Peremptory and unless orders are made by the court to ensure exact compliance both in terms of time and action. The principle is that court orders must be obeyed and any party who disobeys such an order is not allowed to proceed. The degree and the effect of the disobedience are matters the court may consider but they will not be sufficient in themselves to avoid the consequences of the failure to obey a peremptory order. Any such disobedience will generally be treated by the court as contumelious; Tolley v Morris [1979] 1 WLR 592, and the court should not be too ready to find excuses to mitigate the effect of enforcing the order.

In Re: Jokai Tea Holdings Ltd [1992] 1 WLR 1196, Browne Wilkinson V-C explained:

"The rationale of such a penalty [is] that it is contumelious to flout the order of the court, if a party can explain convincingly that outside circumstances account for the failure to obey the peremptory order and that there was no deliberate flouting of the court’s order, his conduct is not contumelious and therefore the consequences of contumely do not flow...... In my judgment, in cases in which the court has to decide what are the consequences of failure to comply with an unless order, the relevant question is whether such is intentional or contumelious. The court should not be astute to find excuses for such failure since obedience to orders of the court is the foundation on which its authority is founded. But, if a party can clearly demonstrate that there was no intention to ignore or flout the order and the failure to obey was due to extraneous circumstances, such failure to obey is not to be treated as contumelious and therefore does not disentitle the litigant to rights which he would otherwise have enjoyed."

In the same case, Sir John Megaw pointed out that the noun ‘contumely’ means insolent reproach or abuse. Where that is found to be the case, the court will have no difficulty in deciding to enforce the order. Many cases fall short of that but will still result in the order being brought into effect. He preferred the word ‘contumacious’ to contumely defining contumacy as ‘perverse and obstinate resistance to authority’.

In the present case, and bearing in mind the previous conduct of the officers of the defendant, I am not satisfied that the defendant has clearly demonstrated that his conduct was not contumacious but it would appear that should have been noticed by his lawyer and corrected. Had it been, I have little doubt the defendant would have been able to produce the reports a few days earlier and so bring himself within the terms of the Order. I also bear I mind that the trial is ready to proceed in a few days time.

I those circumstances, I refuse the application to strike out. I make it clear that it will only be in rare cases that this court will be persuaded not to enforce a peremptory or unless order where the conduct of the party disobeying the order is contumelious or contumacious.

The order to strike out was sought on substantial grounds and, despite my decision to refuse it, I order that the defendant shall pay the plaintiff’s costs incurred in the application filed on 8 March 2002 and leading to the Order of 22 March and in the subsequent application to strike out filed on 15 May leading to this Ruling.

NUKU’ALOFA: 31^st May, 2002

CHIEF JUSTICE