Petelo v National Bank of Samoa [2021] WSDC 3 (23 February 2021)

IN THE DISTRICT COURT OF SAMOA
Petelo v National Bank of Samoa [2021] WSDC 3 (23 February 2021)

Case name:	Petelo v National Bank of Samoa
Citation:	[2021] WSDC 3
Decision date:	23 February 2021
Parties:	FAAMANINO PETELO v NATIONAL BANK OF SAMOA AND TULILI ALATIMU
Hearing date(s):	09 December 2020
File number(s):	DC303/19
Jurisdiction:	CIVIL
Place of delivery:	District Court of Samoa, Mulinuu
Judge(s):	Judge Mata’utia Raymond Schuster
On appeal from:
Order:	I therefore find that it is necessary for EPC to be joined as a party to these proceedings to determine and settle all questions involved in the matter. The matter is adjourned to 9 March 2021 at 2pm for EPC to file a Statement of Defence and/or counterclaim to the pleadings against it.
Representation:	Mr A. Su’a for Plaintiff Mr S. Wulf for First Defendant Mr H. Schuster for Second Defendant Ms W. Pogi for proposed Third Defendant
Catchwords:	background – the law - conclusion
Words and phrases:
Legislation cited:	District Court and Rule 12 of the Magistrates’ Courts’ Rules 1971
Cases cited:	Meisake v Public Service Board of Appeal [1971] WSLawRp 2; [1970-1979] WSLR 8 (13 January 1971) SOROKA (AS TRUSTEES OF PAKAU TRUST) v WAIKATO DISTRICT COUNCIL — BC201962883; NZHC, Hamilton Registry, 1 October, 11 November 2019],
	Paccar Inc v Four Ways Trucking Inc , r .56(1)(b)(i). Barker J, Newhaven Waldorf Management Ltd v Allen Kós J, Pegang Mining Co Ltd v Choong Sam, Mitchell v Attorney-General, Mainzeal Corp Ltd v Contractors Bonding Ltd [1989] NZHC 35; (1989) 2 PRNZ 47 (HC)
Summary of decision:

IN THE DISTRICT COURT OF SAMOA

HELD AT MULINUU

IN THE MATTER: DC303/19

BETWEEN

FAAMANINO PETELO of Faleata, Samoa
Plaintiff

A N D

NATIONAL BANK OF SAMOA LTD, an incorporated company registered in Apia, Samoa
First Defendant

A N D

TULILI ALATIMU, businesswoman of Siusega
Second Defendant

Counsel: Mr A. Su’a for Plaintiff

Mr S. Wulf for First Defendant

Mr H Schuster for Second Defendant

Ms W. Pogi for proposed Third Defendant

Hearing: Hearing 9^th December 2020
Decision: 23^rd February 2021

RESERVED DECISION

1. This is an application by the first defendant for joinder of the Electric Power Corporation (hereinafter referred to as “EPC”) as a defendant in these proceedings on the grounds:
   • (i) That the first defendant is entitled to full indemnity and contribution by the proposed third party;
   • (ii) That the third defendant is entitled to some relief and or remedy relating to or connected with the original subject matter of the action and substantially the same as some relief or relief claimed by the plaintiff;
   • (iii) That any question or issue in the action should properly be determined not only as between the plaintiff and the first defendant but also as between the plaintiff and the proposed third party, or as between any or either of them;
   • (iv) That any question or issue related to or connected with the plaintiffs claim is substantially the same questions or issues arising between the plaintiff, the first defendant and the proposed third party and should properly be determined as aforesaid.
2. Counsel for the applicants did not cite the appropriate rule upon which the application is founded. However, given the amount claimed is less than SAT$20,000, it is therefore within the civil jurisdiction of the District Court and Rule 12 of the Magistrates’ Courts’ Rules 1971 (hereinafter referred to as Rule 12) applies which states:
   • 12. Order joining parties - The Court may at any stage of the proceedings either upon or without the application of either party, and on such terms as appear to the Court to be just, order that the name of any party, whether a plaintiff or a defendant, improperly joined be struck out, and that the name of any person who ought to have been joined, or whose presence before the Court may be necessary to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the action, be added, whether as plaintiff or defendant.
   • Cf. S.R. 1948/197, rr. 40, 42 (N.Z.); S.R. 1959/18, r. 32 (N.Z.)
3. The Plaintiff and Second Defendant do not oppose the application. Counsel for the proposed Third Party Ms Pogi has filed opposition to the application upon the grounds:
   • (i) The sale by the first defendant of the property to the plaintiff was without the notice of the corporation;
   • (ii) The corporations power supply to the premises existed before the first defendant took over the property;
   • (iii) The corporation’s recovery process included deduction of 50% of the amount of any pre-paid power sales. The name change could not could not take place until the arrears were settled accordingly;
   • (iv) The plaintiff requested for the corporation to provide an up-date of this electricity statement for them to settle the arrears in order for the metre to be registered under her name;
   • (v) That the first defendant is liable to pass on the property free of any encumbrance while it is transferred to the plaintiff;
   • (vi) That the matter is between the plaintiff, the first and second defendants and does not involve the corporation.

BACKGROUND

4. The Plaintiff bought land with a dwelling house from the first defendant via mortgagee sale. The second defendant was engaged by the first defendant to sell the land on their behalf. The plaintiff made a bid to the second defendant of SAT$185,000 which the second defendant conveyed to the first defendant. The first defendant accepted the first defendant’s bid. Prior to finalizing the sale and purchase agreement, the plaintiff became aware of an outstanding electricity bill allegedly between SAT$12,000 and $17,000 under the name of the previous land owner Tavita Fesola’i. It appears that Tavita Fesola’i leased the property and home to Patrick Boon and it was during the occupation by Patrick Boon that the arrears were incurred for Mr Boon is alleged to have tampered with the EPC metre.

THE LAW

5. The general objective for the rule on joinder is as stated in Meisake v Public Service Board of Appeal [1971] WSLawRp 2; [1970-1979] WSLR 8 (13 January 1971). Acting Chief Justice Donne, as he then was, stated:
   • “It is the constant aim of a Court of equity to do complete justice by deciding upon and settling the rights of all persons interested in the subject of the suit, to make the performance of the order of the Court perfectly safe to those who are compelled to obey it, and to prevent future litigation. For this purpose all persons materially interested in the subject ought generally to be parties to the suit, plaintiffs or defendants, however numerous they may be, so that the Court may be enabled to do complete justice by deciding upon and settling the rights of all persons interested, and that the orders of the Court may be safely executed by those who are compelled to obey them, and future litigations may be prevented.”
6. There are two limbs under Rule 12 that the applicant may bring the application and either one or both being satisfied would cause the name of the proposed third party to be joined as a party to proceedings. The first is that the person or entity ought to have been joined. The second is that the presence of the person or entity before the Court may be necessary [see SOROKA (AS TRUSTEES OF PAKAU TRUST) v WAIKATO DISTRICT COUNCIL — BC201962883; NZHC, Hamilton Registry, 1 October, 11 November 2019]. It appears from the grounds postulated by the applicant, they are relying on both limbs.
7. Rule 12 is the equivalent of Rule 4.56 of the High Court Rules 2016 of New Zealand discussed in the Soroka case which states:
   • Rule 4.56 Striking out and adding parties
     • (1)A Judge may, at any stage of a proceeding, order that— ....
       • (b)the name of a person be added as a plaintiff or defendant because—
       • (i)the person ought to have been joined; or
       • (ii)the person’s presence before the court may be necessary to adjudicate on and settle all questions involved in the proceeding.
     • (2)An order does not require an application and may be made on terms the court considers just.
     • ....
8. Associate Judge Smith elaboration of the two limbs from paragraph 66 – 71 provides a helpful guide in dealing with this question of joinder:
   • “[66] The Courts have adopted different approaches to the interpretation of r 4.56(1)(b)(i). In Paccar Inc v Four Ways Trucking Inc , Barker J considered that the limb was intended to apply to:
   • ... those cases in which the person sought to be joined ‘should’ have been joined because it is impossible to do justice between the existing parties without the joinder (eg where the party sought to be joined is jointly interested with either the plaintiff or the defendant in the subject matter of the dispute).
   • [67] In two more recent cases, a more liberal interpretation has been adopted, under which the “ought to have been joined” formula has been read as permitting, subject to the overall justice of the situation, the joinder of any party the plaintiff could have elected to sue in the first place.
   • [68] However in Newhaven Waldorf Management Ltd v Allen Kós J, delivering the judgment of the Court of Appeal, said that the use of the expression “person ought to have been joined” addresses persons whose presence is necessary for the Court to adjudicate the exact issues arising on the pleadings.
   • The second limb — r 4.56(1)(b)(ii)
   • [69] The Court’s general approach was described by the Court of Appeal in Newhaven as liberal, with a fairly low threshold for the making of an order. What is important is the nature of the impact of the proceeding on the additional defendant’s rights. Those rights might not necessarily be confined to legal rights, although the case for joinder will be stronger if they are.
   • [70] In its decision in Newhaven, the Court of Appeal referred to the decision of the Privy Council in Pegang Mining Co Ltd v Choong Sam , where Lord Diplock referred to the great variety of circumstances in which application may be made to join an additional party to an existing action. His Lordship went on to express the view of the Board that:
   • ... one of the principal objectives of the rule [permitting joinder of additional party] is to enable the Court to prevent injustice being done to a person whose rights will be affected by its judgment by proceeding to adjudicate upon the matter in dispute in the action without his being given an opportunity of being heard. To achieve this object calls for a flexibility of approach ...
   • It has been sometimes said ... that a party may be added if his legal interests will be affected by the judgment in the action but not if his commercial interests only would be affected. While their Lordships agree that the mere fact that a person is likely to be better off financially if a case is decided one way rather than another is not a sufficient ground to entitle him to be added as a party, they do not find the dichotomy between “legal” and “commercial” interests helpful. A better way of expressing the test is: will [the intended party’s] rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action?
   • [71] Both counsel referred to Mitchell v Attorney-General , a judicial review case where the Court noted that there may be broader scope for joinder as the potential impact of the rights and liabilities on proposed parties could be wider than in an ordinary civil proceeding. Her Honour said:
   • [18]... the effect of the judicial gloss on r 4.56, and its English equivalent, is to clarify the “necessity” requirement: the rights and liabilities of the party seeking joinder must be rights against, or liabilities to, a party to the action.
   • ...”
9. As this is an application by the first defendant to join EPC, Associate Judge Smith pointed out in Soroka paragraph 72:
   • The position of a defendant seeking joinder is summarised in McGechan on Procedure, where the authors say:
   • The current approach where defendants seek joinder is to treat any opposition by the plaintiff as a factor to be considered, but not a bar to joinder. In Mainzeal Corp Ltd v Contractors Bonding Ltd [1989] NZHC 35; (1989) 2 PRNZ 47 (HC), Barker J held that the plaintiff’s wishes and its possible liability for additional costs are factors to be considered in the exercise of the Court’s discretion. Barker J did not follow previous dicta suggesting that an order upon application by a defendant to join an additional defendant would not generally be made where the plaintiff opposes ... or that the plaintiff’s wishes ceased to be relevant once the grounds for joinder had been established ... The middle ground adopted by Barker J now applies.
10. There are, therefore, two questions to be satisfied by the applicant: under the first limb, is whether joinder of EPC sought to be added as a third defendant is necessary for the Court to adjudicate the exact issues arising on the pleadings? The second question under the second limb is whether EPC’s presence before the Court must be necessary for the Court to adjudicate on and settle all questions involved?
11. In considering the questions above, the court must take a flexible approach to prevent injustices been done to any party as well as taking a fairly low threshold approach for the making of an order.

DISCUSSION

12. The plaintiff pleads that the first and second defendants are obligated to ensure that the property was free from all encumbrances. The first defendant pleads that they did not enter into a contract with EPC and therefore are not liable to the EPC arrears. It further states that EPC should not charge the arrears on the new owner but from the previous owner who incurred the arrears.
13. EPC state in opposition to joinder that this is a matter between the plaintiff, the first and second defendants. EPC will recover what its’ owed notwithstanding who the occupants of the land are.
14. The relief claimed by the plaintiff are damages to the amount for $15,300; orders that the first defendant is held vicariously liable for the acts of the second defendant; costs and further orders or relief as the court deems just in the circumstances.
15. As to the first limb, I am not satisfied that the presence of EPC is necessary or would prevent the court from adjudicating the exact issues arising from the pleadings. However, I do find that the applicant has satisfied the second limb in that EPC’s presence is necessary to adjudicate and settle all questions involved in the matter. There is no dispute that there is an arrear owed to EPC which is holding up the plaintiff’s free and quiet use of the property. The question is who is responsible for settling the arrears? This is the pertinent issue in these proceedings. It is noted that Patrick Boon and Tavita Fesola’i are not named as parties to these proceedings and yet appear to have played a significant role in the historical circumstances of this case. It is without doubt that orders arising from these proceedings will affect the legal, commercial and private interests of one or all of the parties including EPC whether joined as a party or not.

CONCLUSION

16. I therefore find that it is necessary for EPC to be joined as a party to these proceedings to determine and settle all questions involved in the matter. The matter is adjourned to 9 March 2021 at 2pm for EPC to file a Statement of Defence and/or counterclaim to the pleadings against it.

JUDGE MATAUTIA RAYMOND SCHUSTER