Red Balloon Helicopters Pty Ltd v Attorney General [2020] WSSC 72 (10 November 2020)

SUPREME COURT OF SAMOA
Red Balloon Helicopters PTY Ltd v The Attorney General [2020] WSSC 72

Case name:	Red Balloon Helicopters PTY Ltd v The Attorney General
Citation:	[2020] WSSC 72
Decision date:	10 November 2020
Parties:	RED BALLOON HELICOPTERS PTY LTD, an incorporated company having its registered office at Suite 104424 Warrigal Road, Heatherton, Victoria 3202, Australia. (First Plaintiff) AND CHOPPAIR HELICOPTERS PTY LTD, an incorporated company trading as the Helicopters Group (Aust) (ABN 82 087 863 723). (Second Plaintiff) AND THE ATTORNEY GENERAL sued for an on behalf of the Ministry of Revenue and Samoa Customs Service. (Defendant)
Hearing date(s):	-
File number(s):	CP 88/19
Jurisdiction:	Civil
Place of delivery:	Supreme Court of Samoa, Mulinuu
Judge(s):	Justice Nelson
On appeal from:
Order:	- The Motion to strike out is denied. - There will in the circumstances issue an order pursuant to rule 32 of the Civil Procedure Rules for the joinder of Samoa Helicopters Limited as a third plaintiff, plaintiffs to effect service of the necessary documents on Samoa Helicopters Limited within 14 days hereof. - Within a further 14 days the said Samoa Helicopters Limited to advise the court in terms of rule 32 whether they consent or otherwise to such joinder. - These proceedings to be re-mentioned on Monday 14 December 2020 or other date suitable to the parties. - Costs reserved.
Representation:	R Drake for plaintiff S Ainuu for defendant
Catchwords:	Motion to strike out – exemption – statement of claim – redress – release of goods subject to duty – import duty
Words and phrases:
Legislation cited:	Customs Act 2014 Supreme Court Civil Procedure Rules 1980
Cases cited:	Sapolu v Saaga [2018] WSCA 9
Summary of decision:

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU

BETWEEN:

POLICE
Prosecution
AND:

RED BALLOON HELICOPTERS PTY LTD, an incorporated company having its registered office at Suite 104424 Warrigal Road, Heatherton, Victoria 3202, Australia
Defendant
AND:

CHOPPAIR HELICOPTERS PTY LTD, an incorporated company trading as the Helicopters Group (Aust) (ABN 82 087 863 723).
Defendant

AND:

THE ATTORNEY GENERAL sued for an on behalf of the Ministry of Revenue and Samoa Customs Service.
Defendant

Counsel:
R Drake for plaintiff
S Ainuu for defendant

Decision: 10 November 2020

DECISION OF THE COURT
(Motion to strike out)

Background

1. The plaintiffs are companies registered in the State of Victoria, Australia. The first plaintiff is the owner of an AS350 Squirrel Eurocopter (“the helicopter”) operated by the second plaintiff. In December 2015 the second plaintiff hired the helicopter to a third party for use in the Kingdom of Tonga. Without the knowledge and consent of the plaintiffs the third party diverted the helicopter to Samoa where it was used to film the Samoa Survivor TV series. For these purposes the third party established and registered a Samoan company ‘Samoa Helicopters Ltd’ (“SHL”) which imported the helicopter into Samoa in or about April 2016.
2. According to the plaintiffs Statement of Claim the helicopter was initially assessed by the Ministry of Customs and Revenue (“MCR”) as liable to VAGST inclusive of import duty in excess of SAT$270,000. This decision was subsequently revoked. According to the plaintiffs because it was by law VAGST exempt; according to the defendant because the importation was for a new development and tourist related project and because the helicopter could be used to assist the emergency services.
3. The helicopter was accordingly released to SHL and earned income by providing flight services to the film crew of the Samoa Survivor series. Following which it was left parked according to the Statement of Claim at Sogi in Apia probably in the open air. It is also pleaded that the lessee third party then absconded with monies earned from the Survivor series and it appears he is now nowhere to be found.
4. In August 2016 the plaintiffs made arrangements to re-export the helicopter back to Australia. These were blocked by the MCR who required full payment of the assessed VAGST contrary to their earlier decision. MCR took the view that the purpose for granting the exemption had been frustrated and accordingly revoked the exemption pursuant to relevant provisions of the Customs Act 2014. Pending payment MCR also seized the helicopter claiming they were so empowered by the Customs Act 2014.
5. Various unsuccessful efforts were made by the plaintiffs to negotiate an acceptable settlement of the dispute over the period September 2016 to December 2018. Meanwhile the helicopter was stored in a yard opposite Matautu wharf exposed to the elements and the MCR resisted attempts to move the helicopter to a covered secure storage hanger. The plaintiffs allege this caused considerable damage to the helicopter and they have incurred substantial costs in trying to resolve the matter.
6. In or about December 2018 the helicopter was sold by MCR at public auction for the sum of SAT$120,000. The plaintiffs say this was considerably less than its true value which in 2015 was AUD$950,000. This has occasioned loss to the plaintiffs for which they seek redress including for missing parts and loss of income from the defendant. Various other kinds of damage are also claimed.
7. The plaintiffs by a second and alternative cause of action also assert a failure on the part of the defendant to expeditiously or at all pursue SHL for the unpaid duty. These precipitated events which eventually led to the seizure and sale of the aircraft to the detriment and damage of the plaintiffs.

The Motion

8. The defendant seeks to strike out the plaintiffs claim on the basis that the plaintiffs have no cause of action against the defendant and the claim is accordingly frivolous vexatious and an abuse of process. Their argument is the proper plaintiff is SHL as importer of the aircraft. They say the causes of action in the plaintiffs Statement of Claim arise from the actions of SHL and therefore accrue only to SHL. This is the only entity entitled to relief pursuant to rule 34(1) of the Supreme Court Civil Procedure Rules 1980 which provides:

“34. Who may be joined as Defendants – (1) All persons may be joined as defendants in one action against whom the right to any relief in respect of or arising out of the same transaction or event or series of transactions or events is alleged to exist, whether jointly severally, or in the alternative, where if separate actions were brought any common question of law or fact would arise.”

9. They also rely on rule 35 of the Rules which says:

“35. Misjoinder – No action shall be deemed improperly constituted because of the joinder of the plaintiffs or defendants or of different causes of action; but the Court may in any case in which such joinder is considered embarrassing or otherwise inexpedient, order any party or cause of action to be struck out.”

The argument here seems to be that the joinder of the plaintiffs is embarrassing and inexpedient and pursuant to rule 35 the plaintiffs claim should be struck out.

10. The defendant further argues that the plaintiffs claim is statute barred by s.117(2) of the Customs Act 2014. For the purposes of context the whole of s.117 reads:

“117. Release of goods subject to duty-(1) Except as otherwise provided in this Act, or in any cases as may be approved by the Comptroller, and subject to any securities as the Comptroller may require, a person is not entitled to obtain release of goods from the control of Customs until the sum payable by way of duty on the goods is paid in full.

(2) An action or other proceeding may not be instituted against the State or the Comptroller or any Customs officer for the detention of goods during a period before the payment of the full sum so payable.

(3) If the Comptroller considers that undue hardship would result from the payment of duty as required by this section, the Comptroller may, subject to conditions as he or she may think fit to impose, direct the release of the goods from the control of Customs and accept payment of duty by instalment over a specified period.”

Applicable law

11. There is no dispute as to the applicable law. The power of the court to strike out should be exercised sparingly and only in cases where the claim is so clearly untenable that it cannot possibly succeed. The governing principles were restated recently by the Court of Appeal in Sapolu v Saaga [2018] WSCA 9 where it said:

“The jurisdiction is to be exercised sparingly, and only in clear cases where the Court is satisfied that it has both the material and the assistance from the parties required for a definite conclusion. A claim should be struck out only if it is so clearly untenable that it could not possibly succeed.

It follows that the jurisdiction should not be exercised if the pleading could be sustained by appropriate amendment or if there remains the realistic possibility that at trial evidence could emerge to rectify a seeming gap or flaw in the plaintiff’s case.”

Analysis

12. I agree with the defendant, the actions that give rise to the causes of action pleaded by the plaintiffs are directly attributable to SHL. As such the proper plaintiff or at least one of the plaintiffs should be SHL.
13. But I am not certain that this operates to defeat or exclude a claim by the owner and operator of the helicopter. Such a conclusion would require inter alia an examination of the relationship between the plaintiffs and SHL noting that as pleaded in the Statement of Claim, a director of the plaintiffs was also a director of SHL. It would also in my view require an examination of the terms and conditions of hire of the aircraft to the third party to ascertain if the rights of the plaintiffs have been completely subsumed by the hire arrangement. None of these matters were canvassed or referred to in counsels submissions. Whatever the case may be there is no doubting that at the end of the day it is the plaintiffs as the legal owner and operator of the helicopter that must bear the brunt of any loss.
14. The court cannot in these circumstances say that the claim is so clearly untenable that it cannot possibly succeed. Particularly when the defendant acknowledges as it has done here that legitimate causes of action have accrued but say they have been brought in the name of the wrong party and further that in any event they must fail on the merits.
15. I am also not convinced that the failure to specifically plead breach of statutory duty or breach of a duty of care arising after the defendant assumed exclusive possession of the aircraft is necessarily fatal to the plaintiffs action. The matter with respect is more complex than appears at first blush.
16. In relation to rule 35 that is a provision that deals with misjoinder of parties there being no suggestion that here there has been a misjoinder of causes of action. There has been thus far no order for joinder so the issue of whether “such joinder is considered embarrassing or otherwise inexpedient” does not as yet arise.
17. Likewise s.117(2) of the Customs Act has no application. It is apparent from s.117(1) that the subsection relates to actions/other proceedings in respect of goods being held by the MCR pending payment of duty. Actions and other proceedings “for the detention of goods” during that period are barred. The goods in this case the helicopter have long since passed from the control of the defendant and the plaintiffs action is for damage allegedly caused by the unlawful seizure and sale of the goods.

Orders

18. The Motion to strike out is denied.
19. There will in the circumstances issue an order pursuant to rule 32 of the Civil Procedure Rules for the joinder of Samoa Helicopters Limited as a third plaintiff, plaintiffs to effect service of the necessary documents on Samoa Helicopters Limited within 14 days hereof.
20. Within a further 14 days the said Samoa Helicopters Limited to advise the court in terms of rule 32 whether they consent or otherwise to such joinder.
21. These proceedings to be re-mentioned on Monday 14 December 2020 or other date suitable to the parties.
22. Costs reserved.

JUSTICE NELSON