|
|
Home
| Databases
| WorldLII
| Search
| Feedback
High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
CIVIL CASE NO. HBC 104 OF 2020
SYLVIA JOE
Plaintiff
V
PATTERSON BROTHERS SHIPPING COMPANY LTD
First Defendant
AND: MARTIME SAFETY AUTHORITY OF FIJI
Second Defendant
Counsel : Ms L Vaurasi for the Plaintiff
Mr T Kilakila with Ms C Mavoa for the 2nd Defendant
Mr Nawaikula on behalf of Official Receiver
Hearing: 11 September 2024
Judgment: 12 September 2024
EXTEMPORE JUDGMENT
[1] The following two applications are before me:
Background
[2] The history of these proceedings is as follows:
Present applications
[3] On 10 July 2024, the Plaintiff filed a Summons seeking leave to continue its proceeding against the First Defendant.
[4] On 18 July 2024, the Second Defendant filed a Summons to strike out the claim against it with a supporting affidavit. An affidavit in opposition was filed by the Plaintiff on 30 August 2024.
Summons to strike out claim against Maritime Safety Authority
[5] Dealing first with the strike-out application, there are three alternate orders sought by the Second Defendant. These are:
[6] The arguments for the Second Defendant in support of the orders sought are:
[7] The Plaintiff does not, in my view, provide an adequate explanation for the 3 ½ year delay adding the Second Defendant to this proceeding. It was aware, at least from March 2021, that the Second Defendant had provided a clearance to the First Defendant’s ship for the journey to Rotuma in December 2019. The Plaintiff resists the strike out on the basis that the bar is high for making such an order. Further, the Plaintiff argues it has a strong case, and the delay should not preclude the Plaintiff from pursuing its claim against the Second Defendant.
Decision on strike out
[8] The summons to strike out the Plaintiffs’ claim is made under O.18, r.18(1)(a),(b) and (d) of the High Court Rules 1988. The provision reads:
The Court may at any stage of the proceedings order to be struck out or amended any pleading or the 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;
(b) it is scandalous, frivolous or vexatious;
(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.
[9] The principles applicable to a strike out application are well settled. In National NBF Finance (Fiji) Limited v. Buli [2000] FJCA 28, the Court of Appeal stated:
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 proved. If a legal issue can be raised on the facts as pleaded then the courts 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. It follows that an application of this kind must be determined on the pleadings as they appear before the court..[2].
[10] Seneviratne J offered the following helpful discussion of the authorities in South Pacific Metals Ltd v Silikiwai [2021] FJHC 386 (15 December 2021) at [5]:
In Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 3) [1970] Ch 506 it was held that the power given to strike out any pleading or any Part of a pleading under this rule is not mandatory but permissive, and confers a discretionary jurisdiction to be exercised having regard to the quality and all the circumstances relating to the offending plea.
In Drummond-Jackson v British Medical Association [1970] 1 W.L.R. 688; [1970] 1 All ER 1094 it was held;
Over a long period of years it has been firmly established by many authorities that the power to strike out a statement of claim as disclosing no reasonable cause of action is a summary power which should be exercised only in plain and obvious cases.
In the case of Walters v Sunday Pictorial Newspapers Limited [1961] 2 All ER 761 it was held:
It is well established that the drastic remedy of striking out a pleading or, part of a pleading, cannot be resorted to unless it is quite clear that the pleading objected to, discloses no arguable case. Indeed, it has been conceded before us that the Rule is applicable only in plain and obvious cases.
In Narawa v Native Land Trust Board [2003] FJHC 302; HBC0232d.1995s (11 July 2003) the court made the flowing observations:
In the context of this case I find the following statement of Megarry V.C. in Gleeson v J. Wippell & Co. [1971] 1 W.L.R. 510 at 518 apt:
“First, there is the well-settled requirement that the jurisdiction to strike out an endorsement or pleading, whether under the rules or under the inherent jurisdiction, should be exercised with great caution, and only in plain and obvious cases that are clear beyond doubt. Second, Zeiss No. 3 [1970] Ch. 506 established that, as had previously been assumed, the jurisdiction under the rules is discretionary; even if the matter is or may be res judicata, it may be better not to strike out the pleadings but to leave the matter to be resolved at the trial.”[3]
[11] Pathik J made the decision in Narawa v Native Land Trust Board.[4] His Lordship further stated at page 4:
In considering this application I have also borne in mind the following passage from Halsbury’s Laws of England 4th Ed Vol. 37 para. 434 on ‘abuse of process’ which I consider pertinent:
“An abuse of the process of the court arises where its process is used, not in good faith and for proper purposes, but as a means of vexation or oppression or for ulterior purposes, or, more simply, where the process is misused. In such a case, even if the pleading or indorsement does not offend any of the other specified grounds for striking out, the facts may show that it constitutes an abuse of the process of the court, and on this ground the court may be justified in striking out the whole pleading or indorsement or any offending part of it . Even where a party strictly complies with the literal terms of the rules of court, yet if he acts with an ulterior motive to the prejudice of the opposite party, he may be guilty of abuse of process, and where subsequent events render what was originally a maintainable action one which becomes inevitably doomed to failure, the action may be dismissed as an abuse of the process of the court.”[5]
[12] The court’s power to strike out a claim must be sparingly used and only in clear and obvious cases. A party ought not to be denied access to the courts unless the cause of action is so untenable that they cannot succeed. Even where a case appears weak, such that it is unlikely to succeed, this does not suffice to warrant striking out. It is, however, an abuse of the process of the court for a party to bring a case otherwise than in good faith or for proper purposes. A claim may be struck out for disclosing no reasonable cause of action. The facts must be taken as pleaded in the Statement of Claim unless admissions to the contrary by a plaintiff is deposed. An interlocutory application is not the time to resolve factual disputes.
[13] The Second Defendant says that the Plaintiff's case is weak and the absence of a ship survey is significant. I am satisfied, however, that this is not a clear case in which to strike out the claim on the facts as pleaded. The allegations by the Plaintiff against the Second Defendant involves negligence the particulars of which are specifically pleaded in the Amended Statement of Claim. These allegations can only be properly tested and determined by evidence at trial.
[14] In terms of the limitation under s 35 of the Maritime Safety Authority of Fiji Act, it will not assist the Second Defendant if the Plaintiff can establish its cause of action of negligence. The limitation does not operate where the Second Defendant did not act with reasonable care - and this cannot be known until trial.
[15] Finally, I accept there is some basis to the Second Defendant’s concern regarding the Plaintiff’s delay adding it as a party to this proceeding. The Plaintiff should have done this much earlier. However, the proceedings are well advanced and the addition will not significantly delay the conclusion of the proceedings – the winding up of the First Defendant has been responsible for much of the delays over the past few months. By the finest of margins, I have decided not to strike out the Plaintiffs claim against the Second Defendant on the basis of the delay joining it as a party. However, I will make it clear that in the event that the Plaintiff is unsuccessful at trial against the Second Defendant and its evidence against the Second Defendant is underwhelming, then she may face a higher than usual award of costs against her.
Summons for leave to pursue proceeding against Patterson Brothers Shipping
[16] The First Defendant had a winding up order made against it on 7 November 2023. Pursuant to s 531 of the Companies Act 2015:
Where a winding up order has been made or a provisional liquidator has been appointed under section 537, no actual proceeding must be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose.
[17] As per s 531, the Plaintiff must seek the leave of this Court to continue its proceeding against the First Defendant.
[18] The factors for a court to consider in determining whether to grant leave were set out as follows by the Supreme Court in Fiji Revenue and Customs Service v Treasure Island Limited (In Liquidation) [2022] FJSC 14 (29 April 2022):
[7] The appeal which the Revenue wishes to bring raises a short but by no means easy point on the proper interpretation of one of the statutory provisions relating to VAT. The Revenue says that the interpretation of this provision is a matter of considerable importance – not only to the Revenue, but “also to Fiji’s taxation system, the insurance industry and the general public as a whole”. I have no reason to doubt that, but there are other considerations. In Cassegrain v General Cassegrain & Co Pty Ltd (in liquidation) (2012) NSWCA 435, the Court of Appeal of New South Wales adopted the commentary in Austin and Black’s Annotations to the Corporation Act, para 5.47B, which stated:
“The relevant factors to be taken into consideration include the amount and seriousness of the claims; the degree and complexity of the legal and factual issues involved; the stage to which the proceedings, if commenced, have progressed; the risk that the same issues would be relitigated if the claims were to be the subject of a proof of debt; whether the claim has arguable merit; whether proceedings are already in motion at the time of the liquidation; whether the proceedings will result in prejudice to the creditors; whether the claim is in the nature of a test case for the interest of a large class of potential claimants; whether the grant of leave will unleash an avalanche of litigation; whether the cost of the hearing will be disproportionate to the company’s resources; delay and whether pre-trial procedures such as discovery and interrogatories are likely to be required or beneficial.”
[8] The critical feature of this appeal is that the Company was wound up well after the litigation which has resulted in this appeal began. Indeed, it was wound up after the case had got to the Supreme Court, and submissions had been filed in support of and in opposition to the appeal. Since the application for permission to proceed with the appeal is being considered along with the appeal itself, there will be no additional costs to speak of if the appeal is allowed to proceed. In these circumstances, the most important consideration for me is whether the Company’s creditors will be prejudiced if the appeal is allowed to proceed. For that reason, we inquired what the Company’s assets and debts are. We were told that the Official Receiver has not yet received a statement of the Company’s affairs, but that the Company has 8 creditors: one secured creditor for the sum of $14,800,918.18 and 7 unsecured creditors for sums totaling $635,395.31. As for its assets, we were told that the Company’s shareholders had forecast that they would fetch something in the region of $53m. On those figures, that would leave more than enough for a full distribution to made to the creditors. As an aside, we asked why the Company went into liquidation when its assets far exceeded its liabilities. Counsel for the Official Receiver was unable to answer that question. In the circumstances, I would be prepared to give the Revenue leave to proceed with its appeal under section 531. That, of course, does not deal with the Revenue’s need to obtain leave to appeal under section 7 of the Supreme Court Act. I shall return to that later in this judgment.[6]
[19] I am satisfied that leave should be granted here. The reasons are as follows:
Orders
[20] My orders are as follows:
.....................................
D. K. L. Tuiqereqere
JUDGE
Solicitors:
Shekinah Law for Plaintiff
[1] Other causes of action are also pleaded.
[2] My emphasis.
[3] My emphasis.
[4] [2003] FJHC 302 (11 July 2003).
[5] My emphasis.
[6] My emphasis.
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/fj/cases/FJHC/2024/587.html
