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White Industries Australia Ltd v Ruby Investments Ltd [2005] FJHC 242; HBC0125d.2004s (24 August 2005)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. 125 OF 2004

Between:

WHITE INDUSTRIES AUSTRALIA LIMITED
Plaintiff

and

RUBY INVESTMENTS LIMITED
THOMAS ARCHER
KIM HUGHES
Defendants

Mr. F. Haniff with Mr. J. Apted for the Plaintiff
Mr. W. Clarke for the Defendants

Date of Decision: 24 August 2005

DECISION

This is an application by summons for summary judgment brought by the plaintiff against the defendants pursuant to Order 14 of The High Court Rules 1988.

The claim by the plaintiff White Industries Australia Limited (the ‘Company’) is for final judgment of the following claims in the Statement of Claim stated in the summons herein as follows:

1. Against the First Defendant:
   
   • (i) Judgment in the sum of $3,790,057.13 and for such further interest as may accrue under the mortgage from 1 January 2004 to the date of judgment;
     
2. Against each of the Second and Third Defendants:
   
   • (i) that each be ordered to immediately withdraw the caveat he lodged against CT 19263.
     
3. Against each of the First, Second and Third Defendants:
   
   • (i) costs;
     
   • (ii) such further or other relief as this Honourable Court deems just.
     
4. General damages and exemplary damages to be assessed against each of the Second and Third Defendants for unlawfully lodging caveats against CT 19623 with the Registrar of Titles.
   

As far as the pleadings go, the writ of summons herein was issued on 22 April 2004 and the Amended Statement of Defence was filed on 19 July 2004. Then on 20 July 2004 the plaintiff makes the present application for summary judgment.

I have before me for my consideration an affidavit of Travers Williams Duncan followed by affidavits in reply of second defendant Thomas Archer filed 15 October 2004 and 23 March 2005 followed by the affidavit of third defendant Kim Hughes on 9 May 2005 and Siteri Cevalawa on 27 September 2004. The plaintiff through affidavits of Duncan replied to the defendants’ affidavits on 23 November 2004 and 26 April 2005.

The defendants opposed the application and counsel for the respective parties filed useful written submissions.

Consideration of the application

The plaintiff commenced proceedings by way of writ of summons on 22 April 2004 against the defendants in the following circumstances:

(a) against the first defendant the sum of $3,790,057.13 being sum advanced to first defendant together with interest as more particularly described in the Statement of Claim; the loan was secured by way of mortgage of 7 acres 1 rod 5.8 perches of land being Lot 7 of DP 4709 and all the land in CT. 19263. No payment has been made under the mortgage and as at 31 December 2003 the abovementioned sum was owing to the plaintiff.

(b) as against the second and third defendants the plaintiff says that they have unlawfully lodged caveats against CT 19263 with the Registrar of Titles thereby unlawfully preventing the plaintiff from being able to register the mortgage under the provisions of the Land Transfer Act.

The plaintiff says that it is entitled to punitive and exemplary damages against the second and third defendants as well as being entitled to recover from them its losses.

On 19 July 2004 an Amended Statement of Defence was filed. In it they say that there was total failure of consideration and the plaintiff’s failure to obtain all requisite approvals from the Reserve Bank of Fiji and Fiji Trade and Investment Board as required by the Exchange Control Act. The plaintiff says that the agreement and mortgage are void and it is not liable to the plaintiff for the sum of money alleged or for any monies whatsoever.

The second and third defendants say in their defence that the failure of the plaintiff to lodge and register a mortgage is as a result of the plaintiff’s failure to obtain the requisite Reserve Bank of Fiji and FTIB approval.

The second and third defendants further state that the plaintiff is not entitled to register the said mortgage because of the total failure of consideration in respect of an agreement between the plaintiff and the first defendant which agreement was never performed thereby making the first defendant not indebted to the plaintiff.

The second and third defendants also state that as shareholders in the first defendant company they have a right to lodge the said caveat of their interest in the said property. They say that the caveats were lodged after the plaintiff unsuccessfully attempted to lodge its mortgage.

The second and third defendants say that although they performed their terms and conditions the plaintiff has not performed the terms and conditions, namely it did not obtain the requisite Reserve Bank of Fiji if FITB approvals required by the Exchange Control Act and other Government of Fiji approvals.

The plaintiff has set out in sufficient detail the principles applicable in an application for summary judgment under Order 14 of The High Court Rules 1988.

The principles therein stated are to be borne in mind in considering the application before me.

The onus remains in the plaintiff throughout to establish that the defendants have no defence. If the Court is not finally satisfied on this point the application has to be dismissed.

In considering this application this Court cannot become embroiled in deciding the merits of the claim but to confine itself to the pertinent issue of whether there was an arguable defence.

The law is this that the defendants do not have to prove their case on a summary judgment application. If credible evidence is rendered by the defendant, there will have to be a particularly strong case for the plaintiff in order for the Court to be able to be satisfied that there is no defence.

Conclusion

In this case it is not denied that the mortgage has been executed but not registered because of the caveats lodged by the second and third defendants.

It is also not disputed that nothing has been paid under the mortgage by the defendants.

Upon hearing counsel for the parties and upon reading the written submissions made by both counsel I am satisfied that there is no justification by the second and third defendants to lodge the said caveats in their capacity as shareholders in the plaintiff company.

As far as the plaintiff’s claim against the first defendant is concerned I find that there are triable issues. In the circumstances the matter of ‘delay’ raised by the defendants is irrelevant at this stage for me to decide in this application.

Certain passages in regard to triable issues from the judgment in Powszechny Bank Zwiakowy W Polsce v Paros (1932) 2 K.B. 353 are worth noting in this regard. In that case at p.359 Greer L.J. said:

“It has long been the rule that in proceedings under Order XIV, what the Court, whether this Court or the King’s Bench Division, has to ascertain is whether there is a triable issue. If there is, no matter how strongly the Court may anticipate that it will be decided in the plaintiff’s favour, it must order a trial.”

He goes on to say that:

“All the defendant need say is that he requires the plaintiff to prove his case, and the law puts upon the plaintiff the onus of proving it. When the defendant says he does not admit the claim he need not carry the case any further than to say: ‘There is a triable issue and I want to have it tried’.”

Great care should be exercised in granting summary judgment and should not be exercised unless there is no real question to be tried (Fancourt v Mercantile Credits (1983) HCA 25; (1983) 154 CLR 87 at 99; Theseus Exploration NZ v Foyster (1972) 125 CLR 507).

On the purpose of Ord.14, the following passage from the judgment of Parker L.J. in Home and Overseas Insurance Co. Ltd v Mentor Insurance Co (UK) Ltd (in liq) (1989) 3 All E.R. 74 at 77 is pertinent:

“The purpose of Ord 14 is to enable a plaintiff to obtain a quick judgment where there is plainly no defence to the claim. If the defendant’s only suggested defence is a point of law and the court can see at once that the point is misconceived the plaintiff is entitled to judgment. If at first sight the point appears to be arguable but with relatively short argument can be shown to be plainly unsustainable the plaintiff is also entitled to judgment. But Ord 14 proceedings should not in my view be allowed to become a means for obtaining, in effect, an immediate trial of an action, which will be the case if the court lends itself to determining on Ord. 14 applications points of law which may take hours or even days and the citation of many authorities before the court is a position to arrive at a final decision.”

On the affidavit evidence before me I am satisfied that judgment should not be entered against the first defendant bearing in mind the principles as to the burden of proof as stated by Thomas J in Hibiscus Shopping Town Pty Ltd v Woolworths (Q’land) Ltd [1993] NTSC 21; (1993) 113 FLR 106 at 109. He said:

“The legal burden of proof is borne by the plaintiff throughout the application, however when he has established a prima facie right to an order, a “persuasive” or “evidential” burden shifts to the defendant to satisfy the court that judgment should not be given against him:” see Australia & New Zealand Banking Group v David [1991] NTSC 74; (1991) 105 FLR 403; 1 NTLR 93.

I also refer to the following passage from the judgment of Somers J in Australian Guarantee Corporation (NZ) LTD v Wyness (1987) 2 NZLR p.326 at p.330 which is as follows:

“We do not consider this case lays down any general rule that where a defence is raised which invokes the discretion of the Court under some statutory provision the power to enter summary judgment should not be exercised. So to hold would we think add a gloss to the rules about summary judgment. Where, as in the two cases mentioned, the evidence before the Court shows that an inquiry is necessary, or there is insufficient evidence to enable the Court to be satisfied the defence must fail or that discretionary relief will not be given, the proper course will be to refuse to enter summary judgment. If, however, it is apparent that there is no further evidence available, and that the defence cannot succeed, then judgment should be entered.”

In all the circumstances of this case I do not consider this to be a proper case for summary judgment against the first defendant provided the first defendant brings a sum of money into Court within a certain time mainly because the mortgage has been executed and all that remains to be done is to register it.

In the exercise of my discretion on the facts and circumstances of this case, for the above reasons, it is ordered as follows:

(a) That summary judgment is refused against the first defendant but it (the first defendant) is ordered to deposit into Court the sum of $1,450,000.00 within 28 days.

(b) The parties to without undue delay proceed with due diligence to have the matter entered for trial.

(c) The caveats lodged by the second and third defendants are ordered to be removed immediately to enable the plaintiff to register the mortgage in question.

(d) Liberty is reserved to either party generally to apply to Court on matters incidental to this Order.

(e) The costs are to be costs in the cause.

D. Pathik
Judge

At Suva
24 August 2005