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High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL ACTION NO. HBC 380 of 2007
BETWEEN
MATAPO LIMITED
1st Plaintiff
AND
VUKISCH & BORICH LIMITED
2nd Plaintiff
AND
THE MINISTRY OF FINANCE & NATIONAL PLANNING
1st Defendant
AND
THE MINISTRY OF WORKS & ENERGY
2nd Defendant
AND
THE ATTORNEY-GENERAL OF FIJI
3rd Defendant
Appearances: Samuel K. Ram for the plaintiffs
Office of the Solicitor General for the defendants
Date of Hearing: 24 June 2008
Date of Ruling: 27 June 2008
RULING
[1] The defendants by summons filed on 23 June and issued on 24 June 2008 seeks the following orders:
(a) That leave be granted to appeal the decision or order made in the High Court of Fiji at Lautoka on 2nd May 2008 dismissing the defendants application to have the matter struck out.
(b) That further proceedings in the High Court be stayed pending the hearing and determination of this application and the appeal upon the grant of leave.
(c) That the action be converted to a Writ of Summons/Statement of Claim in view of the substantial dispute of the facts.
(d) That time for filing and service of this application be abridged.
[2] The application is supported by an affidavit of Atunaisa Nayago, the Works Officer of the Momi Project dated 20 June 2008. The application was purportedly made pursuant to Sections 12 and 20 of the Court of Appeal Act and Rule 26 of the Court of Appeal Rules. The application which I had directed be issued returnable before me at 9.15 on the 24 June was strongly opposed.
Background of proceedings
[3] By expedited originating summons filed on the 14 December 2007 the plaintiffs sought the following relief:
(i) Whether in accordance with the various deeds between the plaintiffs and the defendants, the construction of the Momi Bay Drive and Pipeline project (referred to as "the project") has reached practical completion.
(ii) Whether the defendants are required by the provisions of the various Deeds entered into between the plaintiff and the defendant, to reimburse the plaintiff for the construction cost of the project forthwith.
(iii) Whether either of the defendants are required by the provisions of the various Deeds to provide full particulars of the defects alleged by the defendants in the Momi Bay Drive and Pipeline Project forthwith.
(i) The project has reached practical completion such that project cost under the Deed to Procure Design and Construction of Momi Bay Drive and Pipeline (referred to as "Momi Bay Deed") dated 21st of April 2004 and subsequent Deeds have to be reimbursed to the plaintiffs forthwith.
(ii) The date of practical completion is to be determined in accordance with the provision of the Deed dated 20th of December 2005.
(iii) The full reimbursement of the project cost was to be done by the defendants on the 30th of March 2007.
(iv) The defendants are required by the provisions of the
various Deeds to provide full particulars of the defects alleged by the defendants in the Momi Bay Drive and Pipeline Project forthwith.
$25,479,678.10 (Twenty Five Million Four Hundred and Seventy Nine Dollars Thousand Six Hundred and Seventy Eight Dollars and Ten Cents) to the Fiji Development Bank under the Credit Facility in the name on the second plaintiff.
(ii) Further and/or in the alternative the defendant do provide
full particulars of the defects allegedly in the project and the costs of repairing such alleged defects.
(iii) The defendant be ordered to pay costs of the plaintiffs.
[4] Filed with the summons were comprehensive affidavits of Phillip Temo, Director of the 1st plaintiff and Raymond John Vuksich, Director of the 2nd plaintiff. An acknowledgment of service was filed by the defendants on 22 February 2008. Also filed was a summons by the defendants to strike out the plaintiffs’ action. The defendants’ application was dismissed on 2 May 2008. The order was sealed on 15 May. I had ruled inter-alia that the application was misconceived, guised in the form of an Arbitration Act Section 5 application to stay the proceedings, when quite clearly the defendants had not invoked the Section 5 procedure. Such application would have required the defendants to satisfy the statutory pre-conditions which they had not done. On 16 May the proceedings were called before me and I was informed by learned counsel for the plaintiffs that an early hearing date was sought for the hearing of the originating summons. Mr. Ram did not object to the States application for further time to file and serve an answering affidavit in respect of the substantive proceedings. I ordered that the defendants file and serve an answering affidavit(s) within 14 days and granted liberty to the plaintiffs to file and serve a reply, if necessary, 14 days thereafter. The hearing fixture of 24 and 25 June was set down.
[5] The defendants failed to comply with the timetable order in respect of the filing of affidavit evidence on which they intended to rely. An affidavit in reply by Mr. Nayago was filed the day before the hearing, that is on 23 June 2008. Given the late filing of this affidavit and the defendants’ summons returnable before me on the first day of the hearing, the hearing could not proceed. The entire morning session was taken up hearing the defendants’ application.
Leave to appeal the interlocutory ruling of 2 May 2008
[6] The relevant principles for consideration are contained in the following authorities. In Totis Incorporated spor (Fiji) Limited, Richard Evanson v John Leonard Clark and John Lockwood Sellers[1] the then President of the Fiji Court of Appeal, Sir Moti Tikaram stated:
"It has long been settled law and practice that interlocutory orders and decisions will seldom be amenable to appeal. Courts have repeatedly emphasized that appeal against interlocutory orders and decisions will only rarely succeed. The Fiji Court of Appeal has consistently observed the above principle by granting leave only in the most exceptional circumstances."
[7] Thompson JA sitting as a single judge of appeal in K.R. Latchan Brothers Limited v Transport Control Board and Tui Davuilevu Buses Limited[2] said:
"The granting of leave to appeal against interlocutory orders is not appropriate except in very clear cases of incorrect application of the law. It is certainly not appropriate when the issue is whether the discretion was exercised correctly unless it was exercised either for improper motives or as a result of a particular misconception of the law. The learned judge has given full reasons for the order he has made. There is no suggestion of impropriety in the appellant’s affidavit. There is an allegation of misconception of the law, but if there was a misconception of the law, it is not a clear case of that. That matter can be made a ground of appeal of any appeal against the final judgment of the High Court, if the appellant is unsuccessful in the proceedings there."
[8] And further the Fiji Court of Appeal in Kelton Investments Limited v Civil Aviation Authority of Fiji[3] relied upon a decision of the Supreme Court of Victoria, Australia (Full Court) in Niemann V Electronic Industries Ltd[4] where Murphy J. said at page 441:
"Likewise in Perry v Smith [1901] ArgusLawRp 51; (1901), 27 VLR 66 & Darrel Lea Case [1969] VicRp 50; [1969] V.R. 401, the Full Court held that leave should only be granted to appeal from an interlocutory judgment or order, in cases where substantial injustice is done by the judgment or order itself. If the order was correct, then it follows that substantial injustice could not follow. If the order is deemed to be clearly wrong, this is not alone sufficient. It must be shown, in addition, to affect a substantial injustice by its operation. It appears to me that greater emphasis therefore must lie on the issue of substantial injustice directly consequent on the order. Accordingly, if the effect of the order is to change substantive rights, or finally to put an end to the action, so as to effect a substantial injustice if the order was wrong, it may more easily be seen that leave to appeal should be given."
[9] The President of the Court of Appeal then went on in Kelton to say:
"If a final order or judgment is made or given and the applicants are aggrieved they would have a right of appeal to the Court of Appeal against such order or judgment. Therefore, no injustice can result from refusing leave to appeal.
The courts have thrown their weight against appeals from interlocutory orders or decisions for very good reasons and hence leave to appeal is not readily given."
[10] Although when dealing with an application for leave to appeal, it is not appropriate to delve into the merits of the case by looking into the correctness or otherwise of the order intended to be appealed against, in the present application the proposed grounds of appeal (Annexure B – Mr. Nayago’s affidavit) seem to me to be patently unmeritorious. In respect of Ground 1, the intent of the parties to resolve their dispute by arbitration was not in issue. The defendants had failed to establish the pre-requisites required before an action could be struck out, the application being a strike out application. As for Ground 2, the case relied on by the defendants was clearly distinguishable. In Fiona Trust and Others v Yuri Privalou and Others[5] the charterers had applied for a stay under the Arbitration Act 1996 on the basis that the matter should have been determined by arbitration. In the present case the defendants did not apply for a stay under the Arbitration Act as they were required to do. They applied to strike out the proceedings, an entirely different proposition. Ground 3 suggests that the defendants were willing to comply with the dispute mechanism under the Deed. There was not a shred of evidence before me supporting such a contention. If an application had been made under Section 5 of the Arbitration Act, the defendants would have been required to establish that at the time when these proceedings were commenced they were ready and willing to do all things necessary to the proper conduct of the arbitration. This was not established at all. The evidence contained in the plaintiffs’ affidavits showed otherwise. Ground 4 was not an issue which was addressed in the strike out application.
[11] There has been nothing placed before me in this matter to suggest that there will be injustice to the defendants if leave to appeal is not given or that the issues now raised could not be raised on appeal after these proceedings have been finally determined. The defendants also face a further difficulty in that they were required to seek an extension of time to appeal, the time for appealing against an interlocutory order having expired. There is no such application before me, rendering the application for leave to appeal incompetent.
Stay of proceedings
[12] Of critical importance is that the defendants have not sought an enlargement of time within which to file an appeal. I have upheld Mr. Ram’s submission that as matters presently stand consideration of the factors which I am required to take into account in the exercise of discretion in such applications[6] would merely be an academic exercise. The proper application that should have been made was an application for leave to appeal and for an extension of time to appeal. The latter requirement has not been satisfied nor is there any evidence before me satisfying the pre-conditions justifying an extension of time.
Abridgment of time
[13] This prayer was granted. The present application was issued returnable on the date of issue and was heard on the day of issue without the plaintiffs being accorded the benefit of two clear days service.
Order for the action to be continued as if begun by writ
[14] Until the day before the hearing, the originating summons proceeded on the basis that it was an uncontested application, the defendants having failed to file and serve affidavit evidence opposing the orders sought in the plaintiffs’ action. Mr. Turaga strongly submitted that given that the defendants’ affidavit in reply raised significant contested issues of fact, there should be an order for the action to be continued as if begun by writ. Mr. Ram in opposing the application submitted that the prayers sought in the originating summons were all matters of construction of the Momi Bay Deed dated 21 April 2004 and subsequent Deeds. I indicated to him in the course of the hearing that the prayer contained in 3(i) of the originating summons for judgment in the sum of $25,479,678.10 was clearly disputed. Further that notwithstanding the deeming provision contained in clause 2 of the Deed dated 20 December 2005 which prescribed that the conditions in clauses 7.1(b) and 7.1(c) of the Momi Bay Deed shall be deemed to have been complied with if Matapo in good faith delivered the documents required by clause 7.1(a) of the Momi Bay Deed on or before 30 March 2007, the defendants had also raised significant factual issues of whether the project had reached practical completion, particularly in view of the contention, that Matapo did not comply with the deadline of 30 March 2007.
[15] Mr. Ram having been served with the defendants’ affidavit in reply on the morning of the hearing was hampered by the fact that the short service did not afford him the opportunity to obtain firm instructions in regard to matters relating to the prayer for judgment of $25,479,678.10. I had indicated to the parties that I would reserve my decision on this aspect of the defendants’ application until I had heard further argument after Mr. Ram took full instructions. Consideration of directions under Order 28 rules 5(3) and 9 will be made after I have heard further argument from both counsel.
Conclusion
[16] The reliefs sought in prayers (a) and (b) of the application are declined. The remaining issue of whether or to what extent directions ought to be made under Order 28 rules 5 and 9 will be considered after hearing further submissions from the parties. The late filing of this application and the late filing of the defendants’ affidavit evidence meant that the hearing of the substantive proceedings could not proceed. The plaintiffs were ready to proceed. The hearing fixture was vacated. The fault lies entirely with the defendants. I have accepted Mr. Turaga’s explanation that the delay was occasioned because of difficulties he faced in being unable to obtain the necessary information required to put the Government’s case before me within time. In the circumstances it would be inappropriate to make orders for costs against him personally. However the plaintiffs are entitled to wasted costs for the two days assigned to hear the substantive matter.
Orders
(i) Orders (a) and (b) prayed for in the summons of 24 June 2008 are declined.
(ii) The summons is adjourned to 14 July 2008 for further hearing.
(iii) The defendants are to pay to each plaintiff wasted costs of $1000.00 per day for 24 June and 25 June 2008 within 28 days.
Gwen Phillips
JUDGE
At Lautoka
27 June 2008
[1] Civil Appeal No. 35 of 1996 at page 15 cited in Satendra Prasad Investment Ltd v Denarau Investment Ltd and Anr, Civil Action HBC
241 of 2006L
[2] Civil Appeal No. ABU0012 of 1994
[3] (1995) FJCA 15 – 18 July 1995
[4] [1978] VicRp 44; (1978) V.R. 431 cited in Satendra Prasad Investment Ltd
[5] [2007] UHHL ALL ER (D) 233 (Oct)
[6] See Natural Waters of Viti Ltd v Crystal Clear Mineral (Fiji Ltd) FCA Civil Appeal No. ABU 0011 of 2004S (18 March 2005) page 3
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