Woodroffe v Mataia [2017] WSCA 5 (31 March 2017)

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Case name:	Woodroffe & Anor v Mataia

Citation:	[2017] WSCA 5

Decision date:	31 March 2017

Parties:	LEULUAIALII OLINDA WOODROFFE & ANOR (Appellants) and ASIATA MATAIA (Respondent)

Hearing date(s):	28 March 2017

File number(s):	CA 18/16

Jurisdiction:	Civil

Place of delivery:	Court of Appeal of Samoa, Mulinuu

Judge(s):	Honourable Justice Blanchard Honourable Justice Panckhurst Honourable Justice Tuala-Warren

On appeal from:	Supreme Court

Order:	(a) strike out the counterclaim cause of action alleging negligence; (b) decline to strike out the cause of action alleging failure to account; (c) decline to intervene in relation to the refusal of an order fixing security for costs; and (d) order that costs lie where they fall.

Representation:	O Woodroffe for the Appellants S Wulf for the Respondent

Catchwords:

Words and phrases:

Legislation cited:	(Civil Procedure) Rules 1980 s 70 Limitation Act 1975

Cases cited:	Enosa v Samoa Observer Company Ltd [2005] WSSC 6 Reupena v Senara [2015] WSSC 53
	Wilex Cocoa and Coconut Products Ltd v Electric Power Corporation [2009] WSSC 35
Summary of decision:

Court:
Honourable Justice Blanchard
Honourable Justice Panckhurst
Honourable Justice Tuala-Warren

[1] The Plaintiffs in the Supreme Court applied to strike out a counterclaim and, in the event that the claim was not struck out, sought an order for security for costs in the sum of SAT$20,000. The motion was heard before Justice Tuatagaloa who on 18 November 2016 dismissed both aspects of the Plaintiff’s application.

[2] This appeal is against the dismissals. The matter is complicated to some degree because the factual background concerns two separate proceedings, the first of which was commenced almost 20 years ago. Although this is an interlocutory appeal, it is necessary to sketch a little of the background in order to provide a context for what we must decide.

[3] Over a period of years Mr Mataia and his sister, then residents of Auckland, were in the process of purchasing some land in the village of Vaitele, to which land their family had an association. This required the approval of the Land Board and another government agency. In 1997, however, they discovered that the land lot in question had been acquired by the wife of a then Member of Parliament, despite the fact that they had already part-paid for the lot.

[4] Mrs Woodroffe was consulted in Auckland, and she issued proceedings against the Member of Parliament, his wife (as the registered owner) and the two government agencies. On 18 December 1997 the Chief Justice of Samoa made interim orders after hearing counsel including an order that the defendants “as undertaken by respective counsel are to refrain from acts alleged in the motion and affidavits.” We infer that the defendants agreed not to take further steps in relation to the relevant land that might compromise the pending claim of Mr Mataia and his sister.

[5] Mrs Woodroffe’s recollection is that there was a further hearing before the Chief Justice in February 1998 and that decision was reserved. Perhaps on account of the lapse of time there is no paper record before us concerning this hearing. Non-delivery of the reserved decision occasioned ongoing delay and frustration.

[6] Eventually, on 5 August 2008 a settlement was signed between Mr Mataia and his sister and the Member of Parliament and his wife. The wife agreed to transfer the relevant land to Mr Mataia’s sister upon payment of SAT$3,750. The claim against the government agencies remained afoot.

[7] Despite completion of the land transaction the land was not transferred to Mr Mataia’s sister until 2015. We shall explain the significance of this in a moment.

[8] The judgment from February 1998 still remained outstanding and various initiatives to procure its delivery were pursued. But there is still no judgment, and the claim against the government agencies is unresolved.

[9] By February 2011 Mr Mataia had spent a large sum on legal fees. He saw
Mrs Woodroffe and terminated the solicitor client relationship.

[10] Differences arose concerning moneys paid by Mr Mataia into Mrs Woodroffe’s trust account and their subsequent application by the legal firm to meet fees. This dispute culminated in the filing of a defamation proceeding. Mrs Woodroffe sued in her personal capacity and jointly with her husband as the partners of their legal firm. Four Defendants were cited. A media and publication company was the First Defendant and its editor and a journalist were named as the Second and Third Defendants. Mr Mataia was the Fourth Defendant.

[11] On 16 April 2014 an article entitled, “Prominent lawyer denies misappropriating former clients funds,” had been published. It indentified Mrs Woodroffe as the prominent lawyer and Mr Mataia as the former client who supplied the information forming the basis for the article.

[12] Soon after the defamation claim was filed in late April 2014 a settlement was negotiated with the first three Defendants. The Plaintiffs filed a notice of discontinuance, leaving Mr Mataia as the sole Defendant.

[13] In his statement of defence Mr Mataia, who is now retired and resident in Samoa, relies upon the affirmative defence of truth in relation to the defamation claim.

[14] Mr Mataia also counterclaims in the defamation proceeding. That claim, as amended on 9 December 2015, alleges that:

[15] The relief sought is the return of $45,000, being the $45,000 earmarked for the instruction of a Queens Counsel, general damages of $15,000 and punitive damages of $5,000 seemingly sought in relation to the alleged negligence in failing to promptly register the Vaitele land in the name of Mr Mataia’s sister. Although no obvious distinction is drawn in the counterclaim we consider that it asserts two causes of action, one of negligence and a second of failure to account. Against this background we will be able to deal with the substance of the appeal relatively briefly.

[16] The principles applicable in a strike-out context are well settled and for present purposes may be shortly stated. Section 70 of the Supreme Court (Civil Procedure) Rules, 1980, provides:

“No cause of action- Where by any proceedings no cause of action is disclosed the Judge may, on the application of the defendant order the proceedings to be struck out.”

This jurisdiction, however, is to be sparingly exercised. A claim may be struck out as disclosing no cause of action only where it is plain and obvious that it is so clearly untenable that it cannot possibly succeed: see Sapolu CJ in Enosa v Samoa Observer Ltd.^[1]

[17] Moreover, where despite inadequacies in the manner in which the case is pleaded the case nonetheless appears to have merit, time may be allowed to amend the pleading. Importantly, in assessing the case the Court proceeds on the assumption that the facts pleaded in the claim are capable of proof: see Reupena v Senara^[2] This assumption may, however, be rebutted where uncontested affidavit evidence establishes that some matter essential to the claim is plainly incapable of proof.

[18] The Plaintiffs (defendants in the counterclaim) submitted that the claim was plainly unsustainable on a number of grounds. The Judge did not accept this, saying:

7. “The counterclaim at paragraph [17] alludes to negligence which negligence is “properly pleaded” in the proposed amended counterclaim. It is well established that a statement of claim (in this case counterclaim) is not to be struck out if the pleadings are capable of amendment. In this case, the amendments are necessary to “more fully and accurately” state the position of the counterclaim. The amendments will not cause any prejudice to the plaintiffs.....

8. “The strike out application fails on this ground”. The amended counter claim is allowed.

[19] The judge then considered whether the counterclaim was statute barred in terms of the Limitation Act 1975. She concluded that whether the 6 years limitation period was met was contentious, unsuited for determination in an interlocutory context and that this aspect must “go to trial where all issues of fact and law can be determined”.

[20] Because we consider the counterclaim asserts two causes of action our analysis is necessarily different. The amended counterclaim at paragraph 17 pleads negligence in failing to register Mr Mataia’s sister’s land for the period from 2009 to 2015 and cites as particulars failures to follow instructions and to register the conveyance within a reasonable time. General and punitive damages are claimed, but there is no pleading of actual loss attributable to the sister not having been the registered owner over the six year period. Nor when this was raised with Mr Wulf could he point to any loss. Given the settlement in 2008 (see [6]), presumably Mr Mataia’s sister had control and use of the land from that point.

[21] Mrs Woodroffe submitted in support of a stike-out that a loss arising from late registration was not even pleaded, yet loss is an essential element of the tort of negligence, and even if there was some undisclosed loss it would be a loss sustained by Mr Mataia’s sister and she is not a party to the claim. Counsel also argued that neither general or punitive damages were available in the absence of actual loss.

[22] We agree that this cause of action is misconceived and cannot possibly succeed. Indeed, at the hearing little was said in response to the above arguments, rather attention became focused on those parts of the counterclaim that we see as referable to a cause of action for failure to account.

[23] Both the original counterclaim filed on 11 July 2014 and the amended version of 9 December 2015 alleged a failure to account, the latter with added particulars. Affidavits were also filed on both sides. Mr Woodroffe’s affidavit showed that from December 2005 to April 2009 NZD $72,600 was paid into the firm trust account to cover fees. All of this sum, together with interest earnt on the $72,600 over time, has been applied to fees. There is a balance of only $7.46 held in Mr Mataia’s name.

[24] Mr Woodroffe also provided a list of fee invoices to support the total sum taken from Mr Mataia’s account. Although the Vaitele land claim accounted for most of the fees claimed, other work undertaken on Mr Mataia’s behalf has also resulted in fee invoices.

[25] Mr Mataia’s affidavit dated 26 October 2016 raised matters relevant to the alleged failure to account. He disputes the extent of the work Mrs Woodroffe was instructed to undertake, asserts his instructions were not followed and denies that any of the fee invoices were rendered to him in the normal way. He also asserts the existence of a fee agreement whereby money in his trust account was earmarked for particular purposes, for example payment of a Queens Counsel.

[26] The relevant facts are seriously in dispute. The matters pleaded by Mr Mataia, at least at this point, must be assumed to be capable of proof. Without a substantive hearing it cannot be said this cause of action is bound to fail, nor that the claim is statute-barred.

[28] The Civil Procedure Rules do not make provision for security. However, it is well understood that the Supreme Court has inherent jurisdiction to fix security and that it does so when the justice of the particular case requires as much: see Wilex Cocoa & Coconut Products Ltd v Electric Power Corporation at [21-37].^[3]

[29] In this case the Judge refused security since she concluded that Mr Mataia (as the counterclaim Plaintiff) was not impecunious and there was merit in his claim. Mrs Woodroffe submitted that this decision was flawed on various grounds.

[30] We need not explore the respective arguments. In the course of the hearing we raised with counsel concerns held by the members of the Court, the nature of which we will mention shortly. We indicated that such concerns prompted us to the view that it was not appropriate to review the decision regarding security, at least at this point. We note that a party may renew an application for security where a change in circumstances warrants it. But, we hope that this course will not prove necessary here for reasons which we will now discuss briefly.

[31] For at least two reasons this case is not well suited to resolution at a Supreme Court hearing. It has been the subject of a Judicial Settlement Conference in November 2015 and of a Law Society inquiry in March 2016. As a result, details of the fees charged and the basis for such charges are now a matter of record. It is time for the parties, either alone or with assistance, to confront the issues and resolve the dispute. Secondly, the cost of a Supreme Court hearing will be significant. The opportunity to reach an out of court settlement making use of the records now available should be fully explored before still more legal costs are incurred. That said, to find a resolution will require some give and take, and for both sides to be sensible and realistic.

We also implore the parties to consider our comments concerning the best way forward.

HONOURABLE JUSTICE BLANCHARD
HONOURABLE JUSTICE PANCKHURST
HONOURABLE JUSTICE TUALA-WARREN

^[1] Enosa v Samoa Observer Company Ltd [2005] WSSC 6 at p.5.
^[2] Reupena v Senara [201SC 53 at [10] & [11; [11].
^[3] Wilex Cocoa and Coconut Products Ltd v Electric Power Corporation [2009] WSSC 35

Court of Appeal of Samoa

Woodroffe v Mataia [2017] WSCA 5 (31 March 2017)