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New Zealand Pacific Training Centre v Fiji Islands Revenue and Customs Authority [2006] FJHC 69; HBC034.2003 (29 August 2006)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. 34 OF 2003

NO. 170 OF 2006

BETWEEN

NEW ZEALAND PACIFIC TRAINING CENTRE
Plaintiff

AND

FIJI ISLANDS REVENUE AND CUSTOMS AUTHORITY
Defendant

Appearances: Messrs Suresh Maharaj & Associates for the plaintiff
The Legal Officer, FIRCA for the defendant

Hearing: 2 August 2006
Decision: 29 August 2006

JUDGMENT
(Summons to strike out)

[1] Before me is a summons to strike out the originating summons herein on the grounds that it does not disclose any reasonable cause of action. The application was filed by the defendant on 19 July 2006.

[2] This case has already been the subject of judgments both in this Court and the Fiji Court of Appeal. The background facts are contained in pages 1 – 3 of the Fiji Court of Appeal judgment delivered on 15 July 2005.

The submissions

[3] Learned counsel for the defendant, Mr. Solanki filed comprehensive and helpful submissions. He strongly submitted that the plaintiffs originating summons for "a declaration that the defendant is bound by and estopped from acting contrary to the advice, assurance and representations made by and given by the Fiji Labour Government in 1999 that no VAT is payable by educational institutions in Fiji" does not disclose a reasonable cause of action and it also does not raise any legal issues to be determined. He submitted that this was a plain and obvious case for the exercise of discretion in the defendant’s favour under O. 18 r. 18 HCR. He argued in essence that the representation relied on by the plaintiff could not create an estoppel preventing the defendant from enforcing the VAT Decree 1991 which it is obligated by law to enforce.

[4] Mr. Maharaj argued that prayer (i) of the plaintiffs originating summons raises a complicated legal issue about the imposition of tax. He argued that there was a serious issue about whether the representation relied on by the plaintiff gave rise to an estoppel.

Principles of law in striking out

[5] A useful and succinct analysis of the principles I am required to consider are contained in the Extempore judgment of Connors J in Krishna & Another –v- Automart Limited & Others (Civil Action No. HBC0388 of 2000L) at page 2 where he said:

The provisions of Order 18 Rule 18 have been considered by the court on numerous occasions and the authorities which those considerations consistently rely on have not changed in recent times. It is perhaps convenient to look at the decision of Mr. Justice Byrne in Action No. 0018 of 1986, His Lordship there referred to the relevant authorities on page 4 of his judgment where he said and I quote:-

"The law governing an application such as this is well settled. Lindley MR in Hubbuck v Wilkinson [1889] 1 Q.B. 86 page 91 said that it is only in plain and obvious cases that recourse should be had to the summary process under Order 18 Rule 18(1) of the Rules of the High Court. This was affirmed in Kemsley v Foot & Ors [1952] A.C. 345. In Attorney General of Duchy of Lancaster v L.N.W. Ry Co. [1892] UKLawRpCh 134; [1892] 3 Ch 274 said that Rule 18 can only be invoked when the claim is on the face of it "obviously unsustainable."

And again, the caution that should be exercised when considering applications of this type was highlighted by Mr. Justice Pathik in Hemant Kumar v Suresh Kumar & Ors [2003] Civil Action No. 33 of 2003 where His Lordship in applying Attorney General v Shiu Prasad Halka [1972] 18 FLR 210 at 215 said and I quote:-

"I think it is definitely established that the jurisdiction to strike out proceedings under Order 18 Rule 18 should be very sparingly exercised, and only in exceptional cases. It should not be exercised where legal questions of importance and difficulty are raised."

[6] The Fiji Court of Appeal in National NBF Finance (Fiji) Limited –v- Nemani Buli Civil Appeal No. ABU0057 OF 1998 expressed the principles as follows:

"The law with regard to striking out pleadings is not in dispute. Apart from truly exceptional cases the approach to such applications is to assume that the factual basis on which the allegations contained in the pleadings are raised will be provided. If a legal issue can be raised on the facts as pleaded then the Court will not strike out a pleading and will certainly not do so on a contention that the facts cannot be proved unless the situation is so strong that judicial notice can be taken of the falsity of a factual contention ...."

[7] The notes of the Supreme Court Practice 1995 at 18/19/11, quotes a statement of principle reinforcing the doctrine that the discretion be sparingly exercised and only in exceptional cases:

"So long as the statement of claim or the particulars (Davey –v- Bentinck [1892] UKLawRpKQB 216; [1893] 1 Q. B. 185) disclose some cause of action, or raise some question fit to be decided by a Judge or a jury, the mere fact that the case is weak, and not likely to succeed, is no ground for striking it out (Moore –v- Lawson (1915) 31 T.C.R 418, C.A; Wenlock –v- Moloney [1965] 1 W.L.R. 1238; [1965] 2 AllER 871, CA)." (emphasis added)

[8] It is with these principles in mind that I go on to consider the defendant’s application.

Consideration of application

[9] It is not without reservation that I have upheld the plaintiff’s submission. A legal issue is raised, that is, whether the representation relied on created an estoppel. In my view the plaintiff’s case is weak and not likely to succeed but this is not a ground for striking it out. I am mindful that Mr. Maharaj has not addressed me at all on the law on whether an estoppel can be created in law in the circumstances relied on. Mr. Solanki’s submissions in this regard remain unanswered. But I have not been asked to determine that issue as a preliminary question. Mr. Maharaj did not submit on the law regarding the issue at all.

[10] Were it not for the fact that the case is listed for hearing in a fortnight, I would have called for further submissions from Mr. Maharaj. He maintains that his client is entitled to be heard on the substantive hearing dates already fixed. I agree. The defendant waited a year after the Court of Appeal judgment to bring the present application. The matters raised in this interlocutory hearing and the submissions made about them will be relevant in the hearing of the substantive matter. No doubt Mr. Maharaj will address me on legal principle and precedent in regard to the contentions pleaded by the plaintiff.

[11] It may be that the parties consider that this is a proper case for the issue to be tried as a preliminary question. It does not appear that the defendant seriously contests that the representation was made. It may save much time and expense to both parties if this course of action were pursued.

[12] I refuse the defendant’s application and order costs in the cause. The case will be called for mention on 1 September at 9.00 am. The parties are to inform me whether the issue be tried as a preliminary question under 0.33 r. 3 HCR.

Gwen Phillips
JUDGE

At Lautoka
29 August 2006