Salani Se'e Galu Resort v Harris [2012] WSSC 50 (21 March 2012)

SUPREME COURT OF SAMOA

Salani Se’e Galu Resort v Harris [2012] WSSC 50

Case name: Salani Se’e Galu Resort v Harris

Citation: [2012] WSSC 50

Decision date: 21 March 2012

Parties:

Salani Se’e Galu Resort, a duly incorporated company having its registered office at Salani v Chris Harris and Leasa Harris, of Sydney, Australia, Resort Managers.

Hearing date(s):

File number(s): CP 135/11

Jurisdiction: Civil

Place of delivery: Mulinuu

Judge(s): Nelson J

On appeal from:

Order:

Representation: Ms K Drake-Kruse for plaintiffs and Ms G Stowers for defendants

Catchwords:

Words and phrases:

Legislation cited:

Supreme Court Civil Procedure Rule 1980

Cases cited:
Meta’i v Drake [2000] WSSC 49
Tirinity Crhistian Centre v Graceland Broadcasting Network [2008] WSSC 20
Nikau Holding v BNZ [1992] PRNZ 430

Summary of decision:

IN THE SUPREME COURT OF SAMOA

HELD AT MULINUU

CP.135/11

BETWEEN:

SALANI SE’E GALU RESORT a duly incorporated company having its registered office at Salani.

Plaintiff

AND:

CHRIS HARRIS AND LEASA HARRIS, of Sydney, Australia, Resort Managers.

Defendants

Counsel: Ms K Drake-Kruse for plaintiffs

Ms G Stowers for defendants

Ruling: 21 March 2012

ORAL RULING OF NELSON J

[1] By statement of claim dated 31 August 2011 the plaintiff beachside surf resort issued proceedings against the defendant alleging they were in breach of their contract of employment to manage the resort for two years as from 01 August 2011. The plaintiff sued to recover the cost of air fares to bring the defendants from Australia where they normally live and reside and for money expended to obtain the defendants work permit and driving licenses. The total amount of this part of the claim is $8,458.76. In addition the plaintiff sought general damages of $15,000 plus its costs.

[2] To facilitate the defendants urgent return to Australia “to attend an important job interview on the Gold Coast of Australia” according to their affidavits, the defendants paid to the plaintiff the sum of $12,180.54 to allow them to leave jurisdiction. There is no evidence this payment was made or accepted on a without prejudice basis. The payment covered the special damages part of the aforesaid claim plus the plaintiffs costs presumably as at that date. It seems therefore the part of the plaintiffs claim has already been settled. Only its claim for general damages subsists.

[3] The defendants have denied liability for the claim and seek its dismissal. They also counterclaim in contract and tort for –

(a) general damages of $200,000 for breach of contract on the part of the plaintiffs inclusive or relocation costs;

(b) further damages to be advised prior to hearing;

(c) $60,000 damages for mental anxiety and distress;

(d) actual expenses paid of Australian dollars $897 and Samoan Tala $17,655.54 plus the costs of their proceedings.

There is no dispute that the defendants ordinarily live and reside in Australia and that they have no assets in this country.

[4] In response the plaintiffs have sought security for costs in the sum of $50,000 be paid before the defendants can proceed further with their counter-claim. It is common ground that there is no reciprocal enforcement of judgment process as between Samoa and New South Wales where the defendants reside. The defendants have resisted the security application saying that it would deny them access to justice and prevent them from pursuing a bona fide claim for breach of contract. They also assert it would be unjust to grant the application and that in any event, the amount sought is excessive and designed to prevent their claim from being heard by the Samoan courts.

Relevant Law:

[5] Rule 30 of the Supreme Court Civil Procedure Rule 1980 provides:

“Plaintiff not Resident in Samoa – (1) In any civil proceeding and at any stage thereof the Supreme Court may require a plaintiff or applicant resident out of the jurisdiction of the Supreme Court to deposit any sum of money as security for costs, and may stay the proceeding pending the making of that deposit. (2) When any sum has been so deposited as security for costs, it shall be disposed of in such manner as the Court directs.”

Based on this rule the court routinely orders security for costs for applicants or plaintiffs resident out of jurisdiction.

[6] The relevant principles to be applied have been discussed in a number of previous decisions of the court such as Meta’i v Drake [2000] WSSC 49 and Trinity Christian Centre v Graceland Broadcasting Network [2008] WSSC 20 decision of Justice Vaai where he noted:

“While a collection of authorities such as that in the judgment of Master Williams in Nikau Holding v BNZ (1992) PRNZ 430 are also of considerable help, they cannot substitute for a careful assessment of the circumstances of the particular case. It is not a matter of going through a checklist of the so-called principles (as done by defence counsel here). Since the rule contemplates an order for security where the plaintiff will be unable to meet an adverse award for costs it must also be taken as contemplating that an order for substantial security may in effect prevent the plaintiff from pursuing the claim. Access to the courts by a genuine plaintiff is not lightly to be denied. At the same time the interests of the defendant must also be considered. The defendant must be protected against being drawn into unjustified litigation particularly where it is unnecessarily protracted and over complicated.”

[7] The argument that ordering security for costs would deny the defendants access to justice because it is constitutionally unfair and/or discriminatory and therefore contrary to articles 9 and 15 of the Constitution was dealt with by the learned Chief Justice in the Meta’i case and by the Court of Appeal in Tuia and others v Public Trustee and others (unreported) decision 04 March 2005. In both instances it was soundly rejected and in view of the overwhelming authorities cited this argument should no longer be advanced or pursued by counsels. In the latter case the Court of Appeal held at page 10:

“Essentially the right of access is not seen as absolute and may be subject to limitations and regulation for the proper conduct of court business. We are satisfied that the discretionary provision for security for costs in rule 30 does not infringe the Samoa Constitution or international human rights provisions.”

The law in this area is also subject to the caution expressed in Meta’i that New Zealand authorities must be read in light of the fact that the provisions there are markedly different. Furthermore the New Zealand rules apply not only to non-resident but also to resident plaintiffs.

Discussion:

[8] There are prima facie grounds for making an order. The defendants are resident out of jurisdiction and for these purposes they are in no different a position to a plaintiff bringing proceedings. The Supreme Court Rules have no provisions governing the bringing of a counter-claim. They are therefore “instituting” in terms of rule 10 “proceedings by way of an action” because a counter claim is not a motion. They are in all respects in those shoes of a plaintiff bringing an action pursuant to Part IV of the Supreme Court Rules.

[9] The defendants argument that the counterclaim is only a defence is far from convincing. The counter claim does more than rebut the claim which as noted, they have in the main settled. It asserts breaches of contract in reliance upon other specific terms of the contract. It introduces the notion of implied contractual terms. These issues in particular the latter two are new matters not raised in the original proceedings.

[10] The defendants other arguments rest on the factors referred to by the Chief Justice in Meta’i such as the ability to meet a costs award. For this they rely on payslips from their current employment attached to their affidavits. However that is hardly a basis for assessing their financial position. There is no evidence as to their outgoings and liabilities or anything to indicate how permanent or secure their current employment is. They also cite the merits of their case but an appraisal of the merits should not in my respectful view be made on the basis of factual issues that are in dispute. The defendants face the further hurdle that they have admitted liability by payment of the substance of the plaintiffs original claim. The other factors advanced by the defendants do not assist their case.

Decision:

[11] Ultimately the issue is one of the justice of the matter vis-a-viz both parties. Justice here requires the defendants be permitted to litigate their claims in the Samoan courts if they wish but they must first provide security in the event that they are unsuccessful. The security amount sought by the plaintiff is without question on the high side. It is likely trial of this matter would take two days hearing maximum. There being no translations required, much of the evidence such as documentary evidence can be dealt with on a consent basis. The relevant witnesses would appear to number 3, 4 at the most. A lot rests on the proper construction of the terms express or implied of the employment contract which question is a question of interpretation and of law. It must not be overlooked that the defendants in the counter claim themselves raise issues of law in contract and tort that require to be addressed by legal argument and submission. That factor undoubtedly complicates matters and may result in increased legal costs to both parties. Any security order must also factor that into consideration.

Orders:

Considering all relevant matters the defendants are ordered to pay into court the sum of $10,000.00 within 30 days hereof as security for costs. Failure to do so will result in their counter claim being struck out.

Upon payment of security as aforesaid:

The plaintiff is to file and serve within 7 days further and better particulars of its claim for general damages and as to the basis thereof.

The defendants within 7 days (extendable to 14 days if necessary as they are resident offshore) to file and serve further and better particulars of their claim for general damages and as to the basis thereof.

The defendants will also at that time provide particulars of damage and the basis thereof as claimed by paragraph (b) of their counter claim.

The defendants will also at that time provide particulars as to their claim for damages for mental anxiety and distress as sought by paragraph (c) of their counter claim.

These proceedings will be adjourned sine die for compliance with these orders within the time frames stipulated.

JUSTICE NELSON