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Meridian Service Agency Ltd v Koroi [2011] FJHC 767; HBC166.2011 (3 November 2011)

IN THE HIGH COURT OF FIJI ISLANDS
AT SUVA
CIVIL JURISDICTION

Civil Action No: HBC 166 of 2011

BETWEEN:

MERIDIAN SERVICE AGENCY LIMITED
Plaintiff

AND:

FILIPE KOROI
1st Defendant

AND:

JOHN MAR
2nd Defendant

AND:

LAND TRANSPORT AUTHORITY
3RD Defendant

Counsel: Mr. A. Vakaloloma for the Plaintiff.
1st Defendant in person.
Mr. V. Faktaufon for the 2nd Defendant.
Mr. J. Savou for the 3rd Defendant.

Date of Judgment: 3 November, 2011

INTERLOCUTORY JUDGMENT

1. This is the 3rd defendant's summons for an order that the plaintiff's Originating Summons against the defendants be struck out under O.18 R.18 (1) of the High Court Rules, on the following grounds:
   
   1. That it is scandalous, frivolous or vexatious; and,
      
   2. That is otherwise an abuse of process of the court.
      
2. The 1st and 2nd defendants also support the 3rd defendant's summons.
   
3. On 31.05.2011, the plaintiff filed originating summons seeking following orders:
   
   1. Declaration that the subsequent transfer of the vehicle registration No. EQ 940 from the plaintiff to the 1st defendant is unlawful and illegal;
      
   2. An order that the 2nd defendant do forthwith surrender the said vehicle to the plaintiff;
      
   3. That the defendants to pay costs to the plaintiff incidental to this proceedings on a full solicitor/client indemnity basis; and,
      
   4. Such other further orders or directions as the court deem fit and just given the circumstances.
      
4. The plaintiff relies on the affidavit of Timoci Lolohea, the director of the plaintiff company. The plaintiff is a limited liability company and it purchased the motor vehicle No EQ 940 from Shreedhar Motors Ltd on 09.02.2005.
   
5. In the affidavit, it is deposed that the 1st defendant fraudulently acquired the aforementioned vehicle on or around 15.11.2005, from an agent of the plaintiff, and the second defendant acquired the said vehicle from the 1st defendant on 01.07.2010, and is the current owner of the vehicle.
   
6. The plaintiff's contention is that the said vehicle had been disposed out of the plaintiff- company without the proper approval from the company and on the basis of forgery and fraud and therefore the legal principle 'nemo dat' would apply to this action.
   
7. The 3rd defendant's summons to strike out the plaintiff's action is mainly made on the basis of procedural irregularity. In the affidavit, it is stated that the plaintiff's action based on an allegation of fraud, should have been brought by way of Writ of Summons and not by Originating Summons.
   
8. An affidavit was also filed on behalf of the 2nd defendant, opposing the plaintiff's originating summons. In that affidavit it is deposed that the 2nd defendant was not aware of any dealings made between the plaintiff and the 1st defendant.
   
9. The 2nd defendant also filed an affidavit and stated that he was the bona fide owner of the said vehicle, which was transferred under his name from the 1st defendant.
   
10. The 1st defendant filed an affidavit in reply to the plaintiff's summons and deposed that the said vehicle was transferred through a formal sale and made with lawful authority and the plaintiff was well aware of the transfer made in November 2005.
    

Relevant principles of law

11. Striking out pleadings and indorsements are provided in Orde18 Rule 18 as follows:
    

18(1). The Court may at any stage of the proceedings order to be struck out or amended any pleading or indorsement of any writ in the action, or anything in any pleading or in the indorsement, on the ground that-

(a) It discloses no reasonable cause of action or defence, as the case may be; or

(b) It is scandalous, frivolous or vexatious; or

(c) It may prejudice, embarrass or delay the fair trial of the action; or

(d) It is otherwise an abuse of the process of the court;

and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.

12. The caution that should be exercised when, considering applications of this nature was highlighted in following authorities.
    

'Only in plain and obvious cases that recourse should be had to the summary process under O. 18 R.18(1)' Hubbuck v. Wilkinson [1889]1 QB 86.

13. This rule can only be invoked when the claim is, on the face of it, 'obviously unsustainable.' Attorney General of Duchy of Lancaster v. L.N.W.Ry Co [1892] UKLawRpCh 134; [1892] 3 Ch 274.
    
14. The Fiji Court of Appeal in National NBF Finance (Fiji) Ltd v. Nemani Buli Civil Appeal No 57 0f 1998 expressed the principles as follows:
    

'The law with regard to striking out pleading 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...'

15. Steamship Mutual Association Ltd v. Trollope and Colls (city) Ltd (1986) 33 Build. L.R.77 C.A
    

"The issue of a writ making a claim which is groundless and unfounded in the sense that the plaintiff does not know of any facts to support it an abuse of process of the court and will be struck out.

16. In the present case, the main allegation levelled against the defendants by the plaintiff, is that the defendants had committed forgery and fraud, while transferring the vehicle No EQ 940 to the 2nd defendant. However, the plaintiff's claim against the defendant has been commenced by way of originating summons.
    

Order 5 rule 2 of the High Court Rules reads:

2. Subject to any provisions of an Act, or of these Rules, by virtue of which any proceedings are expressly required to be begun otherwise than by writ, the following proceedings must, notwithstanding anything in rule 4, be begun by writ; that is to say, proceedings-

1. In which a claim is made by the plaintiff for any relief or remedy for any tort, other than trespass to land;
   
2. In which a claim made by the plaintiff is based on an allegation of fraud;
   

17. The relief sought by the plaintiff in his originating summons, when perused, is clearly based on the allegation of fraud and forgery by the defendants. In light of the above section, it is clear that the plaintiff cannot commence this action against the defendants by way of originating Summons, because when an action is based on an allegation of fraud it has to be commenced by way of Writ of Summons.
    
18. Further, the plaintiff has failed to explain as to how the forgery or fraud was committed by the defendants. Merely because it is alleged that the defendants had committed fraud and forgery, it is not sufficient to inform the nature of the cause of action against the defendants. Also, the plaintiff has failed to indorse the substantive issues in its Originating Summons.
    
19. In the affidavit in support of the plaintiff's Originating Motion, it is stated that the 1st defendant acquired the vehicle from an agent of the plaintiff, transfer the said vehicle to the 2nd defendant, and the 3rd defendant registered the transfer. It is further stated that the transfer of the vehicle was made without lawful authority and therefore it was illegal and fraudulent.
    
20. However, it must be noted that the plaintiff has failed to state as to how the 1st defendant acquired the said vehicle from the plaintiff's agents or servants and also, the plaintiff has not identified the particular agent from whom the vehicle was said to be acquired by the 1st defendant.
    
21. In Rakesh Kumar & Another v. Habib Bank Limited, HBC-248 of 09, I dealt with the requirements of a statement of claim as follows;
    

'It must be emphasised that a mere statement of claim is not automatically indicative of a cause of action. The reasonable cause of action means a cause of action with some chance of success. The plaintiff must show some real prospect of his statement of claim. He cannot succeed by showing some whimsical claims on the statement of claim. If the statement of claim fails to address the legal foundation of claim and fails to state what and how the defendant is liable it shall be struck out.'

22. It is plain and obvious that the plaintiff did not follow the correct procedure while instituting this action by way of originating Summons. Further, the plaintiff has failed to show a definite cause of action against the defendants. The affidavit filed, in support of the Summons, does not provide sufficient materials to show that there was a forgery or fraud on the part of the defendants. The plaintiff has even failed to mention the date on which the said vehicle was purchased from Shreedhar Motors by the plaintiff.
    
23. Further, no documents were annexed to the affidavit to establish that the said vehicle was owned by the plaintiff. In an action commenced by way of Originating Summons the affidavit and the documents attached to the affidavit are considered as prima facie evidence for the particular claim. In the present action, the plaintiff alleged that the defendants had committed fraud and forgery.
    
24. However, not a single document was annexed to the affidavit in support to show, that such an offence was committed by the defendants and also no evidence was tendered to establish that the said vehicle had been registered under the plaintiff's name. Furthermore, the statement of claim does not explain clearly and precisely, what the cause of action is and it is confusing.
    
25. When it appears on the face of the record that the plaintiff's claim is incorrect in procedure, lacks merits and has been instituted without any legal basis then it is obviously unsustainable and therefore should be struck out. More importantly, when an action seems to be obviously unsustainable it means it is frivolous and vexatious, and hence, the court shall prevent the improper use of its machinery from being used as a means of vexation and oppression in the process of litigation.
    
26. The term 'abuse of the process of the court' is explained in White Book as follows:
    

This term connotes that the process of the Court must be used bona fide and properly and must not be abused. The Court will prevent the improper use of its machinery, and will, in a proper case, summarily prevents its machinery from being used as a means of vexation and oppression in the process of litigation. (Castro v. Murray (1875) 10 Ex.213; Dawkins v. Prince Edward of Saxe Weimar; Willis v. Earl Beauchamp (1886) 11 P. 59, PER Brawn L.J. p. 63)

27. The term 'abuse of process' is encapsulated in the following extract from Walton v. Gardiner (1993) 177 CLR 378 as follows:
    

'Abuse of process includes instituting or maintaining proceedings that will clearly fail, proceedings unjustifiably oppressive or vexatious in relation to the defendant, and generally any process that gives rise to unfairness.'

28. I therefore, find that the plaintiff's claim against the defendants is not only frivolous and vexatious but also defective and erroneous. It also lacks clarity. For these reasons, I conclude that the plaintiff's action is unsustainable. Therefore, I order that the plaintiff's action be struck out. Cost is summarily assessed in the sum of $1000.00 each to the 1st 2nd and 3rd defendants.
    

Pradeep Hettiarachchi
JUDGE

At Suva
3 November, 2011