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Safari Lodge (Fiji) Ltd v Tiki (Fiji) Ltd [2015] FJHC 876; HBC226.2013 (13 November 2015)

IN THE HIGH COURT OF FIJI
WESTERN DIVISION
AT LAUTOKA

CIVIL JURISDICTION

CIVIL ACTION NO. HBC 226 of 2013

BETWEEN:

SAFARI LODGE (FIJI) LIMITED a limited liability company having its registered office at C/- G H Whiteside & Co, 211 Ratu Sukuna Rd, Suva.

PLAINTIFF

AND:

THE TIKI (FIJI) LIMITED a limited liability company having its registered office at Level8, Dominion House, Thomson Street, Suva.

1st DEFENDANT

AND:

MICHAEL HARVEY Upper Mt Gravatt, P O Box 6196, Queensland, Australia.

2nd DEFENDANT

AND:

ATTORNEY GENERAL OF FIJI as representatives of MINISTRY OF LANDS & MINERAL RESOURCES and DEPARTMENT OF ENVIRONMENT
3rd DEFENDANT

Mr. Samuel Kamlesh Ram with Mr. Niven Ram Padarathfor the Plaintiff
(Ms.) Brenda Jean Naniusfor the First and Second Defendants
(Ms) Mary Motofaga, Principal Legal Officer, AG's Chambers, for the Third Defendant

Date of Hearing: - 01st October 2015
Date of Ruling : - 13th November 2015

RULING

(1) The matter before me stems from the Summons filed by the first and second Defendants pursuant to Order 24, rule (3) and (7) of the High Court Rules and the inherent jurisdiction of the Court seeking an Order for discovery and production of documents.

(2) The Summons is supported by an Affidavit sworn by (Ms) "Ana Tuiwawa", a Barrister & Solicitor employed by Messers "Siwatibau & Sloan", Solicitors for the First and Second Defendants.

(3) The Summons is strongly resisted by the Plaintiff. The Plaintiff filed an Affidavit in Opposition sworn by "Warren Francis", a Director of the Plaintiff's Company, followed by an Affidavit in reply sworn by "Michael Harvey", the Second Defendant and a Director of the First Defendant's Company.

(4) At the oral hearing of the matter, the First Defendant and Second Defendant sought to read and rely on the following Affidavits in Support of the application:-

Affidavit in Support by (Ms) Ana Tuiwawa (sworn on 24th June 2015 and 28th August 2015 respectively;)

Second Defendant's Affidavit in Response sworn on 27th August 2015.

(5) At the hearing in this Court, The Plaintiff (Respondent to application) objected to these Affidavits on the following grounds, [Counsel in his submission writes ....]

(1) "The Affidavits filed an being relied on by the First Defendant are sworn on behalf a limited liability of Company and there is no proper authority as required by the Companies Act exhibited to show that the deponent is authorized to give such affidavit evidence.

(2) An Affidavit for specific discovery requires the personal knowledge of the deponent and as such an Affidavit sworn by the Barrister and Solicitor of the party is not sufficient.

(3) All the Affidavits upon which the First and Second Defendant rely on contains matters of opinion and hearsay.

(4) The Affidavits filed on the 31st August 2015 were filed without leave being granted by this Honourable Court to do so."

(6) In adverso, the Counsel for the First and Second Defendants forcefully submits;

[The Counsel in her submission writes ....]

(1) "We remind that under Order 2 rule (1) a failure to comply with any requirement of the High Court Rules shall be treated as an irregularity and shall not "nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein.

(2) We deny that there is any defect or irregularity or any failure to comply with the High Court Rules in respect of the said Affidavit in Support and Affidavit in Reply.

(3) However, should this Honourable Court disagree, we submit that this Honourable Court has the discretion to make such Order as it thinks fit, including allowing the Affidavits to come in, pursuant to Order 2 Rule (1).

(4) We further remind that the Plaintiff has failed to file any application to set aside the Affidavit in Support for irregularity under Order 2 rule (2), and has indeed taken further steps in these proceedings without raising this issue by filing the Affidavit of Warren Francis sworn on 14 August 2015".

(7) Before I pass to consideration of the preliminary issues raised by the Counsel for the Plaintiff, let me make this preliminary comment.

I note that the Plaintiff has failed to file any application to set aside the Defendant's Affidavit in support for "irregularity" under Order 2, rule (2) of the High Court Rules and has taken further steps in the proceedings without raising the issue of irregularity by filing an Affidavit in Opposition.

I am at a substantial loss to understand why the Plaintiff chose to offer response to the Defendant's Affidavit in support if there is any defect or irregularity in the Affidavit.

If the Plaintiff has considered that the Defendant's Affidavit in support is irregular and defective, it could have moved under Order 02, rule (2) of the High Court Rules. The Plaintiff did not do so.

For the sake of completeness, Order 2, rule (2) of the High Court Rules, is reproduced below in full.

Application to set aside for irregularity (O.2, r.2)

2.(1) An application to set aside for irregularity any proceedings, any step taken in any proceedings or any documents, judgment or order therein shall not be allowed unless it is made within a reasonable time and before the party applying has taken any fresh step after becoming aware of the irregularity.

(2) An application under this rule may be made by summons or motion and the grounds of objection must be stated in the summons or notice of motion.

(Emphasis Added)

Reading those words in their natural and ordinary sense, it seems to me reasonably plain that, Order 2, rule (2) provides that an application to set aside any proceedings for irregularity shall not be allowed unless it is made within a reasonable time and before the party applying has taken any fresh step after becoming aware of the irregularity. The requirements are cumulative. Since the application in the case before me is not made within a reasonable time, the application will not be allowed.If the Plaintiff had considered that the affidavit in support of the Summons for discovery and production of documents was in an irregularity, it could have moved under Order 2, rule (2)before it took another step. If any proceedings are to be set aside on the grounds of an irregularity, Order 2, rule (2) is applicable. An application under this rule may be made by summons or motion and the grounds of objection must be stated in the summons or notice of motion. The Plaintiff on its own volition chose not to follow the High Court Rules. I am curious to know as to why the Plaintiff chose not to follow the High Court Rules. It seems to me perfectly plain that the Plaintiff slept on the matter and did not wake up at all from his slumber. It is now too late to raise such an argument even if it had any validity.

Therefore the Plaintiff's preliminary point must fail because of the delay involved.

In all the circumstances, I am driven to the conclusion that the Plaintiff's preliminary issues were formulated and perhaps conceived as the proceedings for 'discovery' developed.

(8) Leave all that aside for a moment and let me consider the first ground of objection raised by the Plaintiff.

The first ground of objection runs essentially as follows; [Counsel in his submission writes....]

(1) "The Affidavits filed an being relied on by the First Defendant are sworn on behalf a limited liability of Company and there is no proper authority as required by the Companies Act exhibited to show that the deponent is authorized to give such affidavit evidence."

The aforesaid first preliminary point requires some examination of the law regarding the method by which a Company may authenticate a document or proceeding.

In the context of the present case, it is necessary to look closely at the provisions of "Companies" Act.

I should quote Section 40 of the Companies Act, Cap. 247, which provides;

"A document or proceeding requiring authentication by a Company may be signed by a Director, Secretary or other authorised officer of the Company and need not be under its common seal."

(Emphasis Added)

Reference is made to paragraph (02) of the Affidavit in Support filed by the Defendants.

Para(2) "I am personally familiar with the issues arising in this proceeding and with the factual matters deposed to in this Affidavit and I am authorized by the First and Second Defendants to make this Affidavit on their behalf. A copy of the authority letter from the First and Second Defendants is annexed and marked "AT1".

I have traversed the annexure "AT1". It is quite plain from annexure "AT1", the deponent (Ms) Ana Tuiwawa was authorised to depose an Affidavit on behalf of the first and second Defendants by Mr Michael Harvey, the second Defendant and the Director of the first Defendant Company. The letter of authorisation is signed by Mr. Michael Harvey, as the second Defendant and as a Director of the first Defendant Company.

On a strict reading of Section 40 of the Companies Act, it seems to me perfectly plain that the imprint of the Common Seal of the first Defendant is clearly not required.

In view of the foregoing analysis, I have no hesitation in reaching the conclusion that the annexure "AT1" satisfies the requirements of Section 40 of the Companies Act.

In the result, I am constrained to hold that the first ground of objection is devoid of any merits.

(9) The second ground of objection runs essentially as follows; [Counsel in his submission writes...]

Para (2) An Affidavit for specific discovery requires the personal knowledge of the deponent and as such an Affidavit sworn by the Barrister and Solicitor of the party is not sufficient.

With respect, I do not agree at all.In support of his argument, the Counsel for the Plaintiff heavily relied on a passage in High Court case of "Vodivodi v Vakaloloma", 2014, FJHC 840. I have given my mind to the rule of law enunciated in the aforesaid judicial decision.

It seems to me perfectly plain that the rule of law enunciated in the above judicial decision does not really give much assistance to the Plaintiff because in that case there were several other fundamental defects in that Affidavit which led the Court to disregard it.

I must confess that in the context of rule regarding the admissibility of Affidavits sworn by Solicitors with the authorisation of the party, I am inclined to lean in favour of the more liberal judicial thinking reflected in the dictum of "Speight" V.P. in "Watson v Bish Limited", (1985) 31 FLR 41 and "Eichelbaum" J.A. in "Ram v Maharaj" (2001) FJCA 32.

It is necessary to have a close look at Order 24, rule (7) of the High Court Rules.

For the sake of completeness, Order 24 rule (7) is reproduced below in full;

7.-(1) Subject to rule 8, the Court may at any time, on the application of any party to a cause or matter, make an order requiring any other party to make an Affidavit stating whether any document specified or described in the application or any class of document so specified or described is, or has at any time been, in his possession, custody or power, and if not than in his possession, custody or power, when he parted with it and what has become of it.

(2) An order may be made against a party under this rule not withstanding that he may already have made or been required to make a list of documents or affidavit under rule 2 or rule 3.

(3)An application for an Order under this rule must be supported by an Affidavit stating the belief of the deponent that the party from whom discovery is sought under this rule has, or at some time had, in his possession, custody or power the document, or class of document, specified or described in the application and that it relates to one or more of the matters in question in the cause or matter.

(Emphasis Added)

Reading those words in their natural and ordinary sense, it seems to me reasonably plain that, Order 24, rule 7(3) of the High Court Rules, only requires that the Affidavit in support of the discovery of particular documents state that it is the belief of the deponent that the party from whom discovery is sought has or at some time had, in his possession, custody or power of the document, or class of document, specified or described in the application and that it relates to one or more of the matters in the cause or matter.

At this juncture, it is necessary to have a close look at Order 41 of the High Court Rules.

I should quote Order 41, rule (5) of the High Court Rules, which provides;

Contents of affidavit (O.41, r.5)

5. (1) Subject to Order 14, rules 2 (2) and 4 (2), to Order 86, rule 2 (1), to paragraph (2) of this rule and to any order made under Order 38, rule 3, an affidavit may contain only such facts as the deponent is able of his own knowledge to prove.

(2) An affidavit sworn for the purpose of being used in interlocutory proceedings may contain statements of information or belief with the sources and grounds thereof.

(Emphasis Added)

Therefore, it is wrong to say that an Affidavit for specific discovery requires the personal knowledge of the deponent.

The law as I understand from the aforesaid provisions is this;

"An Affidavit sworn for use in interlocutory proceedings may be sworn on the basis of information and belief of the deponent."

Now let me consider what authority there is on this point.

In the Fiji Court of Appeal case of Watson V Bish Ltd [1985] Fiji Law Rp 10; [1985] 31 FLR 41 (22 March 1985), the Court of Appeal made the following pronouncement in response to an objection to an Affidavit sworn by the other party's Solicitor in response to a summary judgment application.

"In the Supreme Court Practice (1967) (The White Book) the following note appears at page 117:

"The Affidavit may be made by the Plaintiff or by any person duly authorised to make it. If not made by the Plaintiff, the Affidavit itself must state that the person making it is duly authorised to do so – Chingwin v. Russell (1910) 27 T.L.R.".

Before leaving the matter we wish to make the following observation.

In the matters leading up to the hearing of the Summons, Affidavits has to be filed containing matters which could well have been very contentious, those contentious matters could have been crucial at the hearing. Yet the Affidavits were made by the Solicitors for the respective parties who then appeared as Counsel in the Supreme Court and before this Court."

(Emphasis Added)

I refer to the case of Ram v Maharaj [2001] FJCA 32; ABU 0031, 1995 (22 November 2001), in which the Fiji Court of Appeal dealt with an appeal against the refusal of the High Court Judge to hear a solicitor who had sworn an Affidavit in the cause.

The Court of Appeal, at paragraph 4 of page 4 of Ram v Maharaj, (supra) clarified the pronouncement made in Watson v Bish Ltd, (supra), stating as follows:

"We have no quarrel with the words of the learned Vice President in the above passage and indeed we endorse them. As is made clear in the above passage from the judgment however it is only when the Affidavit contains matters which are, or could be, contentious in relation to some matter relevant to issues at trial that the Court can properly refuse to hear Counsel. In this case as the record clearly shows, and as is accurately set out in the grounds of the appeal recorded above, the Affidavit in question was in no sense contentious. It merely supported an application for extension of time which had been granted. Its effect therefore was spent and the refusal of the Judge in the Court below to hear Mr. Akbar was in the circumstances unwarranted.

To avoid any misunderstanding we add that nothing we have said is intended to throw doubt on the rule that Counsel should not appear on the application where he or she has sworn an Affidavit in Support, whether the subject matter is contentious or otherwise."

(Emphasis Added)

At this point, I cannot resist in saying that the above authorities are clear, uniform and conclusive that the Solicitors can appropriately swear Affidavits on behalf of their clients as to non contentious matters. The prohibition is actually on the same Solicitor who swore the Affidavit also appearing in Court and conducting the proceedings on behalf of the party.

In this case before me, the Affidavit in question is in no sense contentious. It merely supported an application for production and inspection of certain documents, in interlocutory proceedings.

In this case before me, it is pertinent to note that the deponent in the Affidavit in question did not appear on the application/matter.

In view of the foregoing analysis, I am driven to the conclusion that there is no prohibition on the Affidavit in support sworn by (Ms) Ana Tuiwawa on behalf of the Defendants.

In the result, for my part, I am constrained to say that the second ground of objection is devoid of any merits.

(10) The third ground of objection runs essentially as follows; [Counsel in his submission writes....]

Para (3) All the Affidavits upon which the First and Second Defendant rely on contains matters of opinion and hearsay.

I now proceed to examine the Affidavit in Support sworn by (Ms) Ana Tuiwawa and the Second Defendant's Affidavit in response.

On a strict reading of the Affidavit of (Ms) Ana Tuiwawa, it is perfectly clear that paragraphs 14, 15, 16, 17, 18, 19, 23, 26, 27 and 28 contain the legal opinion of the Barrister and Solicitor. For the sake of completeness, they are reproduced below;

Para 14. It is the view of the First and Second Defendants that any losses or expenses claimed by the Plaintiff should have been documented and therefore the Plaintiff should have documents proving such losses and expenses.

15. Audited financial statements would be required to prove its claim, and if only unaudited financial statements exist, then the Plaintiff's copies of its tax returns would be required to confirm any information in its financial statements.

16. The only discovery provided by the plaintiff is the Plaintiff's unaudited financial statements as at 31 December 2012 and this is inadequate to prove its claim.

17. The Plaintiff must provide its business and financial records from before the alleged excavation works in 2007 and afterwards in order to prove any losses attributable to such alleged excavation works.

18. Also, the Plaintiff must provide separate figures for kite surfing and wind surfing from its other sport activities, in order to show any economic losses to its wind surfing and kite surfing bookings allegedly caused by the excavation works.

19. In order to prove its claim the Plaintiff should be required to waive confidentiality of its financial records and tax returns.

23. The foregoing documents sought from the Plaintiff relate to one or more of the matters in question in this proceeding as follows:

(a) The documents referred to in Category A are relevant to the issue of whether the Plaintiff suffered any financial losses caused by the minor excavation works by comparing wind surfing and kite surfing revenue from before and afterwards, Discovery of these documents would enable the First and Second Defendants to be informed of the case which they have to meet in terms of the claim for damages against them so as to avoid being taken by surprise at trial;

(b) The documents referred to in Category B are relevant to the issue of whether the Plaintiff's business bookings suffered, and in what area of their resort's activities, and the possible causes. These documents are likely to show whether the Plaintiff's business suffered any economic losses, and in what areas, and whether this was the result of the minor excavation works.

26. I do not believe that the limited discovery and disclosures already provided by the Plaintiff are sufficient for the purposes of enabling the First and Second Defendants to properly respond to the Plaintiff's substantial claims of losses, future losses, and expenses.

27. I believe that since the losses and expenses claimed by the Plaintiff are alleged to come out of a cause of action arising in 2007, the losses and expenses would have already been encounted for and documented by the Plaintiff in line with its financial reporting obligations. This would mean that the Plaintiff should not have any difficulty in discovering the documents sought from the records it has.

28. Additionally I believe that any person who wishes to bring a claim for losses and expenses would have already prepared and documented its losses and expenses prior to filing their claim and this therefore would not burden the Plaintiff to provide such documents from the records it has.

An Affidavit should only contain facts and not opinion (see Peter Stinson –v- Miles Johnson [1996] HBC 0326/945 and Kylie-Jane Anderson –v- Iowane Salaitoga (1999) 45 FLR 241 HBC 0353/895 Ruling 3 September 1999).

Moreover, paragraphs 7, 8, 9, 11, 12, 13, 19, 20, 21, 22, 24, 25, 26, 27, 28 and 32 of the Affidavit in response contain personal and legal opinion of the deponent "Michael Harvey", the second Defendant. For the sake of completeness, the aforementioned paragraphs are reproduced below.

Para 7. The Plaintiff has not complained that the documents requested to be discovered don't exist or aren't in the Plaintiff's possession or control but rather, the Plaintiff alleges that any documents other than its unaudited financial records are (i) not relevant and or (ii) confidential.

8. I strongly disagree and dispute this. The Plaintiff's unaudited financial records are not sufficient to prove its claim of loss as the Plaintiff alleges, and the other documents requested are relevant.

9. Further, since the onus of proof is on the Plaintiff to proof its claimed loss, it can waive privilege with respect to any documents otherwise privileged from disclosure such as tax returns.

11. Addressing the first category of claim, it can be easily discerned or inferred that it will be necessary for the Plaintiff to prove damage to water sports equipment by bringing its internal reports or records showing when and how an item of water sports equipment was damaged, and the cost of repairing or replacing it.

12. The documentation produced by the Plaintiff will have to establish a link or connection between the alleged nuisance and the incident in which the equipment was damaged.

13. I say that information such as this will not be found in the Plaintiff's unaudited financial records. I crave leave to refer to the Affidavit of warren Francis sworn on 17 December 2013 and filed on 31 December 2013 (First Affidavit), Annexure "WF-30", being the Plaintiff's unaudited financial return for 2012.

19. However, to prove such loss of income, the Plaintiff needs to show how many group windsurfing or kite surfing bookings were lost due to the alleged nuisance and what the net profit per booking would be.

20. This is best done by comparing the number of bookings in years and months prior to the alleged nuisance and those after.

21. This cannot be done using the Plaintiff's unaudited financial records, as the Plaintiff's unaudited financials only report income from "Dive – Sales and Services [Annexure "WF-30" to the First Affidavit]. There is no way to discern if there was any reduction in the Plaintiff's Income at the material time due to loss of windsurfing or kite surfing bookings from such an entry.

22. The Same objections apply to the Plaintiff's claim for loss of revenue from the date of the writ onwards. This cannot be proven from the unaudited financial records simply because those financials do not record revenue from windsurfing and kite surfing.

24. I say that unaudited financial records not prepared in accordance with generally accepted accounting principles should not be relied upon as the sole source of proof of loss of business. Disclosure have been omitted which may be relevant to the Plaintiff's claim.

25. The Plaintiff's VAT and Income tax returns are relevant in showing how much the Plaintiff earned before and after the alleged nuisance, and are within the power of the Plaintiff to obtain from the tax authorities if necessary.

26. They will also substantiate the income reported in the Plaintiff's unaudited financial records.

27. The bank records will also substantiate the income reported by the Plaintiff in its unaudited financial records and tax returns, particularly if the Plaintiff is accepting payments or deposits overseas.

28. The business records requested to be disclosed all relate to proving that the loss of income claimed by the Plaintiff relates to the alleged nuisance and not other causes, such as global financial crisis and or renovations, and are highly relevant to the Plaintiff's claim.

32 I am informed by my Solicitors and verily believe that under the High Court Rules, a party who obtains discovery may only use the disclosed documents for purposes of conducting his or its own case, and there is an implied undertaking not to use them for any ulterior purpose. The Defendants have no plans to use the discovery for ulterior purposes.

Having said that, I wish to emphasise that this objection has not been raised earlier by way of an application to set aside for irregularity under Order 2, rule (2) of the High Court Rules than the hearing in this Court. Accordingly, I do not uphold this technical point.

(11) The fourth ground of objection runs essentially as follows; [Counsel in his submission writes....]

Para 4. The Affidavits filed on the 31st August 2015 were filed without leave being granted by this Honourable Court to do so."

I do not agree at all. On 17th August 2015, the parties were represented by Counsel. The Court granted 14 days for the Defendants to file an Affidavit in reply. The matter was listed for mention on 01st September 2015. The Defendants complied with the Court Order by filing Affidavit in reply on 31st August 2015.

In the result, for my part, I am constrained to say that the fourth ground of objection is devoid of any merits.

FINAL ORDERS

(1) The preliminary objections are overruled.

(2) I make no Order as to costs.

Jude Nanayakkara
Acting Master of the High Court

At Lautoka
13th November 2015