Dinh v Polar Holdings Ltd [2006] VUCA 24; Civil Appeal Case 016 of 2006 (6 October 2006)

IN THE COURT OF APPEAL OF
THE REPUBLIC OF VANUATU
(Appellate Jurisdiction)

CIVIL APPEAL CASE No. 16 of 2006

BETWEEN:	GILBERT DINH
	Appellant
AND:	POLAR HOLDINGS Ltd
	Respondent

Coram: Chief Justice Vincent Lunabek
Justice Bruce Robertson
Justice John von Doussa
Justice Daniel Fatiaki
Justice Oliver A. Saksak
Justice Christopher N. Tuohy

Counsel: Mr Robert Sugden for the Appellant
Mr Sam Rosewarne for the Respondent

Date of hearing: 26th & 28th September and 3rd October 2006
Date of Decision: 6th October 2006

JUDGMENT

This is an appeal against a final judgment entered in the Supreme Court in the absence of the Appellant and his counsel on 5th April 2006.

The substantive claim was filed by the Respondent Company on 7th December 2004 and concerns the status of a Sale and Purchase Agreement for a consideration of AU$1 million entered into between the parties on 29th September 2003. The Respondent claims that the contract remains extant and seeks specific performance, whereas the Appellant asserts that the Agreement was validly cancelled on or about 8th November 2004.

In this appeal it is unnecessary to consider the substantive claim in any detail. Suffice it to say that the pleadings and sworn statements filed by the parties raise several seriously triable issues.

Of greater relevance to this appeal is the history or chronology of events and orders made by the Court during and after a Directions Hearing on 12th December 2005 which was attended by counsel for the parties and at which among other things, it was agreed by the Court and counsel that 3 days would be set aside for the hearing of the case on, 5th, 6th and 7th April 2006.

It is common ground that the Appellant’s counsel made an oral application on 23rd March 2006 to vacate the assigned hearing dates as he was leaving Vanuatu that day and would be out of the country contesting the general elections in the Solomon Islands at the beginning of April.

In refusing the application, which was opposed by the Respondent, the Judge directed and informed Appellant’s counsel that if he was unable to attend the hearing of the case then he should make alternative arrangements to ensure that the Appellant was represented by other counsel.

Unfortunately Appellant’s counsel flew out of the country that evening and did not either inform the Appellant that the adjournment application had been unsuccessful and that the trial would continue or instruct and arrange alternative counsel to appear for the Appellant at the trial.

In the result, on 5th April 2006 when the trial commenced, neither the Appellant’s counsel or the Appellant or his witnesses were present in Court.

The following is the trial Judge’s notes of what transpired in Court on 5th April 2006:

"CC 226 of 2004

05/04/06

W. Roper for the Claimant

F. Laumae for the Defendant – no appearance

Roper

– Urgent Application made a few weeks ago to adjourn matter, Court decided matter to continue today.

Rule 4.12(f) no fees been paid by Defendant. Judgment should be entered and Court could order that Defendant do not participate in this trial.

- Another problem arises in rule 11.7(4) – ... notice had been given to the Claimant under that rule 11.7(4).

- Letter by Roper of 20 March 2006 making a request under Rule 11.7. Failure to do that sworn statement of Defendant cannot be entered/admitted into evidence.

- No evidence before the Court on behalf of the Defendant that can form part of the Court records. Hence matter should be struck out.

Claimant

- Agreement that Agreement would be replaced with a new contract.
- Defendant – Contract was terminated.

Effect – Claimant – Contract subsists until today as no new contract has been entered.

Effect – Defendant – Contract terminated can enter into a new contract.

If Court believes both Claimant and Defendant then no meeting of minds contract continuing (?).

If Court agrees to issue Orders at end of claim and to costs re: interim Orders on indemnity basis.

See: Submission filed on 14/10/05 (Chronology of events).

Orders

Orders granted.

ORDERS

At Conference on 23.03.06 application by Laumae on his client’s behalf to have the hearing adjourned to another date was refused. The Court issued directions that the hearing dates agreed to by the counsels and the Court on 12/12/2005 be adhered to.

Today Mr Laumae failed to show up. No advice or Notice had been received by the Court as to the reason for non-attendance.

On hearing Mr Roper for the Claimant, the Court makes the following Orders:

(1) The Contract date 29/09/03 has not been terminated and remains on foot.

(2) The Defendant to pay the Claimant’s damages as agreed or to be assessed.

(3) The Defendant to do all things necessary to perform the Contract within 30 days from the date of this Order.

(4) The Defendant to pay the Claimant’s costs of and incidental to these proceedings on a standard basis as taxed or agreed.

(5) The Defendant to pay the Claimant’s costs of the Interim Application filed on 7th December 2004 on an indemnity basis."

It is plain from the Judge’s notes that no enquiry or attempt was made either by the Respondent’s counsel or by the trial Judge to ascertain whether or not the Appellant was personally aware that the hearing of the case was continuing that day.

In this latter regard Appellant’s counsel sought to introduce at the hearing of the appeal a sworn statement of the Appellant dated 14th July 2006 in which the Appellant deposed:

"4. During March, 2006 2 or 3 weeks before the trial on 5 April, Felix Laumae told me that he was leaving shortly to contest the elections in the Solomon Islands and I asked him ‘what about my trial on 5 April?’ or words similar, and he told me not to worry because he was getting it postponed.

5. I heard nothing more from him and assumed that the trial had been postponed. I was not told that this application had been unsuccessful, in fact, I didn’t know how he intended to have it postponed. I was not told that I and my witnesses should be in Court. In fact, I was told nothing at all until I heard about the Judgment when my bank told me about it. When I told Mr Laumae this news he just insisted that the trial had been postponed.
   
6. I was also greatly surprised to read that the trial fees had not been paid. When the trial had been set down in December, 2005, Felix Laumae told me about the trial fees and I gave him money to pay them.
   
7. I realize that Mr Laumae has let me down badly. My failure to defend the case on 5 April, 2006 was solely his fault and I wish to defend the case as I believe my defence is a good one and I want my side of the factual issues to be put before the Court."
   

Counsel for the Respondent sought to cross-examine the Appellant and call the Appellant’s former counsel Mr Felix Laumae Kabini. Three members of the Court hearing the appeal (Robertson, von Doussa and Fatiaki JJ) were constituted to hear and determine this factual matter on 28 September. After hearing and seeing the Appellant and Mr Felix Laumae Kabini who was also called by the Respondent, the Court recorded its decision as follows:

"There were two critical issues which arose at the hearing on Monday upon which it is necessary that we should make findings of fact.

Having heard the two witnesses the Court is satisfied on the balance of probabilities that Mr. Laumae’s law firm had available from December 2005 sufficient funds in Mr. Dinh’s account with which the necessary Court fees could be made. It is not necessary or appropriate in this proceeding, that we make any finding or comment on Mr. Laumae’s belief as to how and when hearing fees should be paid.

The second issue relates to the application which was made for an adjournment of the proceeding on 23rd March 2006. Having heard and seen the two relevant witnesses, the Court finds on the balance of probabilities, that Mr. Dinh was not advised that the application for adjournment had been unsuccessful. We find further on the balance of probabilities that he was never advised that the matter was going ahead on that assigned trial dates and that he should attend with his witnesses or should personally take any alternative steps with regard to the case.

We find as a fact that the first time that he knew that the matter had proceeded to hearing was when Mr. Dinh received advice from the bank that a judgment had been entered contrary to his interest."

It is also plain from the judge’s notes that the trial Judge did not make any orders/rulings pursuant to Rule 4.12(3)(f) – "that (the Appellant) is not to participate in the trial" owing to non-payment of his share of the trial fees; or indeed, under Rule 11.7(1) that the sworn statements filed on behalf of the Appellant are "ruled inadmissible" owing to a failure to present the deponents for cross-examination as required by Respondent’s counsel written notice.

In this latter regard Rule 11.7(1) expressly provides that "a sworn statement that is filed and served becomes evidence in the proceedings...". The Rule uses the present active tense "becomes", not, may or will become. In the absence of a ruling of inadmissibility, the sworn statements filed and served by or on behalf of the Appellant became "evidence in the proceedings" and could not be simply ignored by the trial Judge because the Appellant or the deponents did not appear at the trial to be cross-examined. Needless to say absence of cross-examination goes to the weight, not the admissibility of the sworn statement.

We are fortified in our reading of Rule 11.7(1) when one considers the meaning and effect of the Rules which makes it clear that evidence at a trial may be given either in the form of sworn statements filed and served on the opposite party [Rule 11.3(1)] or "... be given orally" [Rule 12.1(4)(a)].

Rule 1.2(1) of the Civil Procedure Rules No.49 of 2002 provides that: "The overriding objective of these Rules is to enable the Courts to deal with cases justly" and Rule 1.2(2) sets out several non-exhaustive ways for dealing with cases justly. Finally Rule 1.5 imposes a positive duty on the parties to a proceeding to assist the Court to act in accordance with the overriding objective.

In Fujitsu (NZ) v. International Business Solutions Limited and Others, [1998] VUCA 13 Appeal Case No.7 of 1998 this Court in setting aside a judgment entered in the case in the absence of the Appellant said (at p.4):

"...the Rules of Court are intended to further the interests of fairness and justice, and they must be applied with common sense in a realistic way to ensure that the purpose, not just the letter, of the Rules is achieved. When Mr Hakwa did not appear at Court on 2nd July 1998 (cf: Mr Felix Laumae’s absence on 5th April 2006 in the present case) common sense, as well as common courtesy, required that inquiry be made to find out why... we consider the matter should not have proceeded without further inquiry... to ascertain whether (counsel) had merely overlooked the Court appointment or whether his absence was deliberate. In the latter situation, further inquiry would have been necessary to ascertain if the defendants personally were aware of the application".

Later on the same page the Court said:

"The Court in its inherent jurisdiction has power to reopen a judgment obtained in default of appearance by the party against whom a judgment is entered, if the justice of the case so requires."

The final extract we take from page 8 of the Fujitsu judgment:

"The failure to observe a common sense approach to the application of the Rules will frequently result in the party seeking to rely on the technicalities of the Rules not achieving any useful forensic advantage."

In similar vein this Court said in Michel v. The Public Service Commission and Others, [1998] VUCA 10 Civil Case No.7 of 1996:

"It is essential that at every step in a process it is remembered that any action taken should be designed to advance the speedy just and proper determination of a real dispute. Substance must have priority over form.

Except in the most exceptional circumstances every step should involve hearing all persons who have a legitimate or genuine interest in the determination which has to be made."

Despite counsel for the Respondent’s attempt to distinguish the Fujitsu decision, we are satisfied that this Court’s general observations set out in the above passages are equally applicable to the new Civil Procedure Rules which have, as their overriding objective, the just disposal of cases.

Our view is further re-enforced by the provision of Rule 1.7 which empowers the Court, in the absence of an applicable Rule "... to ensure the matter is determined according to substantial justice."

Needless to say given the mandatory duty to assist the Court in furthering the overriding objective of the Rules, the failure on the part of Respondent’s counsel to make the simple, inexpensive, common sense enquiries highlighted in this Court’s decision in Fujitsu constitutes in our view, an irregularity [see: Rule 18.10(1)] sufficient to trigger the exercise of the Court’s ameliorating power in terms of Rule 18.10(2).

It is to the credit of counsel that at the third resumed hearing the Court was advised that an accommodation had been reached and Consent Orders were made as follows:

1. The Decision and Order of Justice Bulu dated 5 April 2006 in Civil Proceeding No.226 of 2004 be quashed and the matter be remitted for rehearing before a different Judge.
   
2. The Appellant be liable for the wasted costs associated with the trial of 5 April 2006, to be taxed if not agreed.
   
3. The costs of this Appeal are to abide the outcome of the hearing of the remitted proceeding.
   

DATED at PORT-VILA this 6th day of October 2006

BY THE COURT

Vincent LUNABEK CJ Bruce ROBERTSON J John von DOUSSA J
Daniel FATIAKI J Oliver A. SAKSAK J Christopher N. TUOHY J