Chan Mow & Co Ltd v Tiavaasu'e [2018] WSSC 80 (7 June 2018)

SUPREME COURT OF SAMOA
Chan Mow & Company Limited v Tuilimu [2018] WSSC 80

Case name:	Chan Mow & Company Limited v Tuilimu Tili Tiavaasue
Citation:	[2018] WSSC 80
Decision date:	07 June 2018
Parties:	CHAN MOW & COMPANY LIMITED a duly incorporated company having its registered office at Apia (Applicant) AND TUILIMU TILI TIAVAASU’E of New Zealand and Matautu (Respondent)
Hearing date(s):	24 May 2018
File number(s):
Jurisdiction:	Civil
Place of delivery:	Supreme Court of Samoa, Mulinuu
Judge(s):	Justice Leiataualesa Daryl Michael Clarke
On appeal from:
Order:	- The Plaintiff’s motion for an order that the Defendant provides security for the costs of the Plaintiff if the Defendant is unsuccessful in its claim is granted. - The quantum of the order for security for costs is fixed at $6,000.00. - The Defendant is to give security for costs in that sum either by paying the same into Court within 28 days or by giving security for the same within 28 days to the satisfaction of the Registrar after the Registrar has consulted with the Plaintiff. - Should the Defendant fail to provide security for costs as ordered in (c), the Plaintiff may apply to the Court for a stay of the Defendant’s counter-claim. - This matter is adjourned for further mention to Monday, 16 July 2018 at 2.00pm.
Representation:	A Su’a for the applicant T Leavai for the respondent
Catchwords:
Words and phrases:	lease over the land, security for costs, the Defendant is not impecunious and will be able to afford any costs in the event of an unsuccessful claim
Legislation cited:
Cases cited:	(Salani Se'e Galu Resort v Harris [2012] WSSC 50 (21 March 2012))His Honour Nelson J, Trinity Christian Centre v Graceland Broadcasting Network [2008] WSSC 20 decision of Justice Vaai, Metai v Drake [2000] WSSC 49 (2 November 2000), His Honour Sapolu CJ, His Honour Lesatele Rapi Vaai stated in Pune v Drake [2015] WSSC 33 (4 February 2015), Nikau Holdings Ltd v Bank of New Zealand [1992] 5 PRNZ 430, Neely v Attorney General [1984] 2 NZLR 636; Trinity Christian Centre of Sana Ana Inc v Graceland Broadcasting Network [2008] WSSC 20.” Risale v Kohlhase & Tupu [2015] WSSC 165, Reid v Fiso [2001] WSCA 4 (23 November 2001) the Court of Appeal, Wilex Cocoa and Coconut Products Ltd v Electric Power Corporation [2009] WSSC 35 (23 April 2009).
Summary of decision:

IN THE SUPREME COURT OF SAMOA

HELD AT MULINUU

IN THE MATTER:

BETWEEN:

CHAN MOW & COMPANY LIMITED a duly incorporated company having its registered office at Apia.
Applicant

AND:

TUILIMU TILI TIAVAASU’E sued for and on behalf of the Ministry of Police.
Respondent

Counsel:
A Su’a for applicant
T Leavai for respondent

Decision: 07 June 2018

RULING (ON APPLICATION FOR SECURITY FOR COSTS)

Background:

1. A review of this file shows a long and unsatisfactory history of delay with adjournments, further adjournments and various further final adjournments.
2. The Plaintiff is the registered owner of Lots 966, 967, 968 and 969 Plan 5929 situated at Matautu (“the land”). The Defendant and his family have occupied part of the land and have done so since 1968 or later.
3. On 3 April 2014, the Plaintiff and the Defendant executed a lease over the land. In or about September 2015, the Plaintiff gave Notice of Termination of the lease.
4. By First Amended Statement of Claim dated 14^th September 2017, the Plaintiff instituted proceedings against the Defendant for possession and eviction of the Defendant from the land and for compensatory damages in the sum of $125,000.00.
5. By First Amended Statement of Defence and Counter-Claim dated 26^th October 2017, the Defendant acknowledged the execution of the lease and the receipt of the Notice of Termination. The Defendant further pleads that the Defendant and his family first came to live on the land in 1968 and paid rent to the original land owners. The land was then sold to the Defendant in 1986 and the Defendant and his family continued to pay rent to the Plaintiff by which time the Defendant had started reclaiming the land by bringing in rocks, coral, sand and gravel from the Vaisigano River to fill the swampy parts of the land. According to the Defendant, they continued to reclaim and fill the land over the years until 2014.
6. The Defendant’s pleading acknowledge that over the years since 1989, the Defendant including his mother met with the Plaintiff’s lawyer and the Plaintiff to discuss the “possibility” of buying the land. The Defendant pleads that the Plaintiff’s lawyer at the time advised the Defendant “to continue paying the lease and occupy the land but not to build any permanent structures using cement or bricks.” The Defendant however further says in his affidavit dated the 15^th of August 2017 that Mrs Drake informed them “not to build any permanent structures or establish boundaries”. The Defendant’s affidavit does not include the qualification pleaded in terms of improvements applying to “using cement or bricks”.
7. Since 1995, the Defendant deposes that he had asked Mr Komisi Chan Mow (“Mr Chan Mow”) every year since about the opportunity to buy the land from the Plaintiff and that “Mr Chan Mow’s answer was always that the First Defendant was to continue to occupying the land, pay the lease and that they would be given the first opportunity to buy once that possibility arose.”
8. The Defendant alleges that in 2007, they were informed that the land was to be sold and when the Defendant approached Mr Chan Mow, the Defendant was informed to continue to occupy the land.
9. Mr Chan Mow in his affidavit dated 4^th April 2018 says that in 1985, lease arrangements were made and rental payments made for the Defendant’s occupation of the land. The lease arrangement he says “for sure” included that they were not to build permanent structures on the land. He says the Defendant asked him to purchase the land the Defendant occupies but he declined the request and says he was never informed by the Defendant of any improvements having been made to the land.
10. The Defendant counter-claims against the Plaintiff for unjust enrichment for the cost of reclamations since 1968 to 2014. There is no dispute that the Defendant resides in New Zealand.

Application for Security for Costs:

11. This is an application by the Plaintiff for security for costs in the sum of $30,000.00 and for a stay of the Defendant’s counter-claim until the security is paid into the Registry of the Court on the grounds:

(i) The Defendant filed a counter-claim against the Plaintiff in the amount of $232,000.00;
(ii) The Defendant ordinarily resides in New Zealand;
(iii) The Defendant is likely to leave Samoa for New Zealand immediately after the hearing of the matter and it would therefore be difficult to recover legal costs against the Defendant; and
(iv) The Defendant has no money or assets in Samoa and would be unlikely to meet the Plaintiff’s costs for defending the counter-claim.

The Law:

12. The Defendant’s counter-claim against the Plaintiff is to be treated as ‘“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 the shoes of a plaintiff bringing an action pursuant to Part IV of the Supreme Court Rules.” (Salani Se'e Galu Resort v Harris [2012] WSSC 50 (21 March 2012)). The Defendant does not contend that the Plaintiff cannot bring this application for security for costs.
13. Rule 30 of the Supreme Court (Civil Procedure) Rules 1980 relevantly provides:

“30. Plaintiff not Resident in Western 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.

...”

14. In Salani Se'e Galu Resort v Harris (supra), His Honour Nelson J discussing rule 30 stated:

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

[6] The relevant principles to be applied have been discusn 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 piff will be unab 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 taintlaintiff 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 defe must be protected against inst being drawn into unjustified litigation particularly where it is unnecessarily protracted and over complicated.”

15. In Metai v Drake [2000] WSSC 49 (2 November 2000), His Honour Sapolu CJ stated:

“In the exercise of the Court’s discretion whether to grant or refuse an application for security for costs, the reestion is n is whether in all the circumstances it is just to make an order for security or not.8221;

16. In setting oing out the test to then be applied, His Honour Lesatele Rapi Vaai stated >Pune v Drake [2015] WS5] WSSC 33 (4 February 2015):

“29. I turn now to consider whether an order for security for costs would be just in all the circumstances.



30. The exercise of the discretion requires the balancing of two competing interests of justice. On the one hand the interest of justice requires that the defendants should be protected against the risk of a cost award that is of no value if the plaintiff is unsuccessful in her claim. On the other hand the interest of justice requires that the plaintiff should not be denied access to the courts by reason of an order for security for costs. See Wilex Cocoa and Coconut Products Ltd v Electric Power Corporation [2009] WSSC 35; Nikau Holdingsdings Ltd v Bank of New Zealand [1992] 5 PRNZ 430.
    

31. The rationale for making an order for security for costs against a plaintiff reg outg outside the jurisdiction of the court is that a successful defendant ought not be put to the time, trouble and expense of enforcing a judgment for costs outside the jurisdiction. See Neely v Attorney General [1984] 2 NZLR 636; Trinity Christian Centre of Sana Ana Inc v Graceland Broadcasting Network [2008] WSSC 20.” (emphasis added)

Discussion:

17. The Defendant resists the Plaintiff’s application for security for costs on the basis that:

(a) the Defendant has assets in the jurisdiction in the unlikely event that the counter-claim is unsuccessful;
(b) the value of the assets is more than adequate to meet the $30,000.00 sought by the Plaintiff; and
(c) the Defendant’s claim is meritorious.

18. The Defendant does not raise impecuniosity as a ground for resisting the Plaintiff’s claim and submits at paragraph 3(b) of their written submissions that “the Defendant is not impecunious and will be able to afford any costs in the event of an unsuccessful claim.”
19. The threshold requirement in respect of this application that the Defendant resides outside the jurisdiction of the Court has been met. There was no dispute that this requirement was not satisfied. The question then is how the discretion in terms of this application is to be exercised.
20. The Defendant deposes in his affidavit that he has assets in Samoa in the form of a cattle farm with “at least 40 cattle at my farm. Each is valued between the range of $1,200.00 and $1,500.00 tala” and the Defendant wishes to submit his cattle as security for costs for this matter...” Through counsel for the Defendant, I was informed that the land on which the cattle are kept is customary land.
21. There was no suggestion during the course of the interlocutory hearing that the Defendant would offer security in the form contemplated and applied in Risale v Kohlhase & Tupu [2015] WSSC 165. In terms of the ability to meet the costs of an award of costs, I am in agreement with the assessment by His Honour Nelson J in Salani Se'e Galu Resort v Harris (supra) where he stated:

“[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...”

22. In terms of the nature of the assets in this jurisdiction being cattle, they are not a fixed asset such as land in the case of Risale v Kohlhase & Tupu (supra) and cattle can be dissipated very quickly. While the cattle may be there today, they may not be there tomorrow and therefore, what assets he may have in the jurisdiction may be dissipated by the time these proceedings have concluded either by sale or for other reasons. It is not satisfactory security in the circumstances.
23. The Defendant has not set out any income in New Zealand nor his ability to meet an adverse costs award from his possible New Zealand income.
24. In terms of the merits of the Defendant’s counter-claim for unjust enrichment, I do not see the counter-claim as having significant merit and on the pleadings and material before me, they may evenly balanced taken at its highest. The Defendant does not contend that the Plaintiff or Mr Chan Mow on behalf of the Plaintiff was informed of the alleged reclamations since 1986 to 2014. The Defendant alleges that the Plaintiff would have seen the improvements on their inspections. The Defendant however expressly pleads that they were informed in 1989 by the Plaintiff’s former lawyer not to build any permanent structures “using cement or bricks” on the land. The Defendant however says in his affidavit of 15th August 2017 that Mrs Drake informed them “not to build any permanent structures or establish boundaries”, without the qualification of “using cement or bricks”. Mr Chan Mow also says that a term of the lease arrangements with the Defendant was that they were not to build any permanent structures on the land.
25. In terms of the merits of the claim as I have assessed them to be, I bear in mind the words of the Court of Appeal Reid v Fiso [2001] WSCA 4 (23 November 2001) where the Court of Appeal stated:

“It is difficult to see how improvements carried out on the land of another can create an equity based on unjust enrichment when the owner has expressly forbidden further expenditure and further occupation.”

26. The Counter-Claim was filed on the 27^th October last year. Whilst a hearing date had been set, I do not consider the delay such as to decline the application. In all the circumstances of this matter, I consider that it is appropriate to order security for costs. The interests of justice requires that the defendants should be protected against the risk of a cost award that is of no value if the defendant is unsuccessful in his claim and an order for security for costs will not in the circumstances deny the Defendant access to the Courts by reason of an order for security for costs.
The Plaintiff seeks security for costs in the sum of $30,000.00 and relies on the affidavit of Mr Chan Mowhe basis for the amount of t of security sought. Mr Chan Mow says that he has incurred $15,000.00 in legal fees to date and expects that more legal fees are likely to be incurred in the sum of $30,000.00. He does not particularise nor did counsel address the basis upon which the $30,000.00 figure was reached, the expected hearing days and any other the anticipated costs.
28. Adopting the approach to the assessment of the quantum of security for costs in Wilex Cocoa and Coconut Products Ltd v Electric Power Corporation [2009] WSSC 35 (23 April 2009) and standing back from the precise amounts claimed and from the precise assessment of costs to consider this case on its own particular facts and what is just and reasonable in the circumstances, I fix security for costs at $6,000.00. The Plaintiff is always entitled to return to the Court seeking additional security depending upon the circumstances Wilex Cocoa and Coconut Products Ltd v Electric Power Corporation (supra).

Plaintiffs Claim:

29. On the material before the Court, the Amended Statement of Defence and the submissions by counsel for the Defendant as I understood them, it appears that the Defendant does not dispute the Plaintiff’s claim for possession (See also: Letter Leavai Law to Summit Lawyers 7 January 2016; paragraph 22, affidavit of Defendant dated 15 August 2017). The Defendant however seems to resist eviction and possession due to his claim for unjust enrichment and it seems, the Plaintiff’s claim for damages arising from their continued occupation of the land.
30. If eviction and possession are not in dispute, I encourage parties and counsel to narrow the issues in dispute and to resolve those prior to the hearing. That will save the Court and the parties time and expense as well as for the Defendant, the risks associated with the Plaintiff’s claim for damages arising from continued possession of the land.

Result:

31. I make the following formal orders:

(a) The Plaintiff’s motion for an order that the Defendant provides security for the costs of the Plaintiff if the Defendant is unsuccessful in its claim is granted.
(b) The quantum of the order for security for costs is fixed at $6,000.00.
(c) The Defendant is to give security for costs in that sum either by paying the same into Court within 28 days or by giving security for the same within 28 days to the satisfaction of the Registrar after the Registrar has consulted with the Plaintiff.
(d) Should the Defendant fail to provide security for costs as ordered in (c), the Plaintiff may apply to the Court for a stay of the Defendant’s counter-claim.
(e) This matter is adjourned for further mention to Monday, 16 July 2018 at 2.00pm.

JUSTICE CLARKE