SC1015

Papua New Guinea
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 68 OF 2006

BETWEEN:

REX PAKI
Appellant

AND:

MOTOR VEHICLE INSURANCE LIMITED
Respondent

Waigani: Salika DCJ, Gabi J, Hartshorn J
2009: 31st August
2010: 9th February

APPEAL – Appeal against defence being struck out for failure to give discovery of documents – consideration of an award of costs on an indemnity basis 

Facts:
The Appellant appealed the decision of the National Court that ordered that his defence be struck out and that damages be assessed as he had failed to give discovery of certain invoices. The appellant argues that once the Court had made a finding that the invoices did not exist it erred by then ordering that the defence be struck out for failure to give discovery of the same (non-existent) invoices.

Held:

1. The finding of Davani J. concerning the appellant’s conduct as to the discovery of the invoices, and Her ruling to strike out the defence was in the circumstances proper and appropriate and in the exercise of discretion under O 9 r 15 of the National Court Rules. 

2. With respect to the Deed of Release, it has no relevance to the question of discovery. It is agreed that the appellant was required by law to maintain the invoices as part of the records of the liquidation for seven (7) years. 

3. The actions of the appellant have caused the respondent an enormous amount of wasted time, effort and money. The conduct of the appellant was improper, unreasonable and blameworthy.

4. This appeal is dismissed

5. The decision of Davani J. to strike out Mr. Paki’s defence in proceedings WS No. 658 of 2002 is upheld

6. Pursuant to Order 9 Rule 15 of the National Court Rules judgment is entered for MVIL for damages to be assessed, plus interest and costs

7. Mr. Paki shall pay the costs of MVIL in respect of the National Court proceedings; and

8. Mr. Paki shall pay the costs of MVIL of these appeal proceedings on an indemnity basis, including any hearing as to quantum. 

Cases cited:

PNG Cases

Aisip L Duwa v Ronald Moyo Senge [1995] PNGLR 140
Alex Latham and Kathleen Marie Latham v Henry Peni [1997] PNGLR 435
Bean v Bean [1980] PNGLR 307
Benny Balepa v Commissioner of Police (1994) N1374
Bishop Brothers Engineering Pty Ltd v Ross Bishop (1989) N705
Don Polye v Jimson Sauk Papaki & Electoral Commission [2000] PNGLR 166
Gulf Provincial Government v Baimuru Trading Ltd [1998] PNGLR 311
Island Helicopter Services Ltd v Wilson Sagati (2008) N3340
Jacob Sarapel v Fred Kulumbu (2003) N2405
Mision Asiki v Manasupe Zurenuoc (2005) SC797
Peter Aigilo v Morauta (2001) N2102
PNG Waterboard v Gabriel M Kama (2005) SC821
POSF Board v Sailas Imanakuan (2001) SC677
Public Curator v Bank of South Pacific Ltd (2006) SC832
Salvation Army (PNG) Property Trust v Ivar Jorgenson and Rex Vagi (1997) N1644
Thiess Bross (Pacific) Pty Ltd v Chief Collector of Taxes [1982] PNGLR 385
William Moses v Otto Benal Magiten (2006) SC875
Willie Mel v Coleman Pakalia (2005) SC790

Overseas Cases

Austrim Nylex Ltd v Knoll and Ors (No. 3) (2002) VSC 290
Holden & Co v Crown Prosecution Service [1990] 2 QB 262
Myers v Elman [1940] AC 282
Orchard v Southern electricity Board [1987] QB 565
P.C.R.Z. Investments Pty Ltd v National Golf Holdings Ltd & Anor (2002) VSCA 24
Ridehalgh v Horsefield [1994] 3 All ER 848
Sirois v Centennial Pontiac Buick GMC Ltd and General Motors of Canada Ltd (1988, 89) N.B.R. (2d) 244

Counsel

J. Brookes, for the appellant
G. Epor, for the respondent

9th February, 2010 

1. BY THE COURT: This is an appeal from the decision of Davani J. delivered on 25th May 2006 whereby Her Honour ordered that the appellant’s defence be struck out and that damages be assessed.

2. The proceedings before Her Honour concerned an application by Motor Vehicle Insurance Limited, the respondent, to have the defence of 
Rex Paki, the appellant, struck out pursuant to Order 9 Rule 15(1) of the National Court Rules. In dealing with the question of the appellant’s failure to give discovery of certain invoices, Her Honour said:

"No doubt, the defendant’s inability to produce invoices is because he did not issue them. He was under an obligation to have kept invoices as records of the liquidation. He has not. Which (sic) means he did not issue any." (Appeal Book (AB), page 274, line 10).

3. The appellant argues that once the Court made a finding that the invoices did not exist it was a mistake to order the defence be struck out for failure to give discovery of the same (non-existent) invoices.

4. The respondent concedes that Her Honour erroneously decided a matter of fact. As a result, it served on the appellant, a notice pursuant to Order 7 Rule 28 of the Supreme Court Rules that it does not seek to discharge or vary any part of Her Honour’s judgment. The respondent submits that the appellant maintained that he had the invoices and consented to the Court orders of 7th December 2004 requiring him to produce the invoices.

5. The issues are: (i) whether on the evidence this Court can come to the same conclusion as Her Honour but for different reasons; and (ii) if so, whether this Court should award costs of the appeal on an indemnity basis.

6. This appeal was heard on 27th June 2007 by Hinchliffe J, Salika J (as he then was) and Gabi J and the decision was reserved. Following the death of Hinchliffe J. before a decision had been given, the parties exercised their entitlement under section 3 of the Supreme Court Act to have the appeal re-heard. This is a re-hearing of the appeal. 

Background

7. In order to appreciate the basis of the respondent’s application under Order 9 Rule 15 of the National Court Rules, it is necessary to set out the relevant factual matters in chronological order. The relevant background factual matters are not in dispute.

8. On 29th September 2000, the respondent was placed into liquidation and the appellant was appointed the liquidator of the respondent. On 9th April 2001, a Deed of Settlement and Indemnity ("the Deed") was entered into between the parties. Clause 10 of the Deed provides that the appellant’s fees for the liquidation "will not exceed K690, 000" (subject to an entitlement to further payments in certain circumstances). On 17th May 2001, the liquidation was terminated and the appellant was discharged as liquidator of the respondent. The liquidation period lasted from 29th September 2000 to 17th May 2001, a period of thirty three weeks, and in that time the appellant paid himself K990, 512 as liquidator. 

9. On 25th May 2002, the respondent commenced proceedings WS No. 685 of 2002 whereby it claimed repayment from the appellant of monies he allegedly overpaid himself during the liquidation. The respondent alleged there was overpayment of between K265, 712 and K792, 512. On 2nd August 2002, the appellant’s lawyers, Namaliu & David Lawyers, filed the appellant’s defence. On 17th December 2003, a notice for discovery was served on the appellant. On 8th March 2004, the appellant served a copy of his verified list of documents. Schedule 1, Part 1, paragraph 3 of his list of documents reads:

"Bundle of invoices raised by the Defendant from the date of appointment as liquidator to the date of termination." (AB, tab 9 page 25). 

10. Gadens Lawyers, acting for the respondent, made repeated calls to Namaliu & David Lawyers requesting copies of the documents. On 16th March 2004, Gadens Lawyers wrote to Namaliu & David Lawyers requesting copies of the documents. In that letter a notice to set down for trial was enclosed for execution by the appellant’s lawyers and to be returned with copies of the documents. The documents, particularly the invoices, were not provided so on 13th August 2004 the respondent filed a notice of motion seeking production of documents. On 21st October 2004, Namaliu & Company Lawyers wrote to Gadens Lawyers advising that:

"…our client is prepared to provide to you the original documents commencing from the date of appointment – to the date of termination. However, the documents are stored away in the archives and therefore would require some good amount of time to locate the relevant documents. We therefore request that you give our client up till the end of next week to locate the documents which are stored in his archives at Korobosea."(AB, tab 17 page 155).

11. Neither the appellant nor his lawyers provided the documents as suggested. 

12. On 7th December 2004, the National Court, by consent, ordered Mr. Rex Paki to:

"produce copies of the documents listed as item 3 in Schedule 1 Part 1 of [his] List of Documents to the Plaintiffs Lawyers within 14 days…." (AB, tab 15 page 102). 

13. On 20th December 2004, Namaliu & Company Lawyers sent a facsimile to Gadens Lawyers, enclosing two tax invoices from RAM Business Consultants dated 10th November 2000 and 17th November 2000 (AB, tab 15 pages 104 to 106). Following telephone enquiries, Namaliu & Company Lawyers advised Gadens Lawyers that they did not have any more invoices from their clients (AB, tab 15 pages 87 & 88). On 19th October 2005, Gadens Lawyers wrote to Namaliu Lawyers requesting copies of the documents in compliance with the Orders of 7th December 2004 and putting them on notice of the respondent’s intention to apply to strike out the appellant’s defence if the documents were not provided (AB, tab 15 page 108). On 28th October 2005, Gadens Lawyers received a facsimile from the appellant himself. The appellant stated that his file had been transferred to Henaos Lawyers and he requested a further month to talk to Henaos Lawyers (AB, tab 15 page 110). There was no word from either the appellant or his lawyers so on 16th February 2006 the respondent filed a notice of motion seeking to strike out the appellant’s defence pursuant to Order 9 Rule 15(1) of the National Court Rules.

14. On 21st February 2006, Gadens Lawyers contacted Henaos Lawyers, who told them that they never acted for the appellant and had never heard of the matter. On the same day Gadens Lawyers also contacted Namaliu Lawyers, who advised that they still acted for the appellant. At the time of serving Namaliu Lawyers with the motion, Gadens Lawyers were advised that the file had been sent to Steeles Lawyers. Accordingly, Gadens Lawyers had to serve the motion on three firms of lawyers to ensure that the application came to the attention of the appellant. 

15. The appellant opposed the application to strike out his defence and filed three affidavits in opposition. They are: (i) two affidavits of Rex Paki dated 16th and 23rd March 2006 respectively; and (ii) the affidavit of Kerenga Kua dated 22nd March 2006. In his affidavit dated 16th March 2006, with respect to the invoices, the appellant deposed thus:

"5…I need one (1) month to locate the other copies...My computer crushed and the data in the computer were erased. I need one (1) month to get hold of hard copies. My hard copies have been misplaced as the liquidation took place in 2000…

9. I found out on 7th March 2006 that my file was not handed over to Henaos Lawyers. I could not locate copies of invoices. I need additional one month hopefully to get copies from MVIL or Mr. Kua’s office.

10. All information they have requested has been provided, except the invoices, there is no deliberate attempt on my part not to give the invoices. I want to give them the invoices. I just have to locate them. I need time…

14. All the bundle of invoices that the Plaintiff’s Lawyers are requesting for are all with them and their client. I have raised those invoices to them and they paid me according to the invoices. I rendered services, raised invoices and they paid me…" (AB, tab 19 pages 161 to 163).

16. In his supplementary affidavit dated 23rd March 2006, the appellant stated thus:

"3. I have been trying hard to locate carbon copies of those invoices but I just could not locate them as they have been misplaced, destroyed or lost over the last 6 years." (AB, tab 22 page 186).

17. On 25th May 2006, Her Honour ordered that the appellant’s defence be struck out and that damages be assessed.

Grounds of Appeal 

18. The grounds of appeal are:

"(a) Her Honour erred in that, having found that the Appellant’s inability to produce certain invoices during the course of discovery was because such invoices did not exist, it was inappropriate and contradictory for the Court then to strike out the Appellant’s pleading for failure or refusal to give proper discovery of such documents.

(b) Her Honour erred in that, having found that the Appellant’s failure to produce certain invoices in the course of discovery was because such invoices did not exist, it was wrong then to characterize the circumstances as an endeavour by the Appellant to avoid giving discovery, or an omission or neglect to comply with an order that such documents be produced.

(c) Her Honour erred in that, in circumstances in which she found that certain documents listed in the appellant’s List of Documents did not exist, she failed to conclude that the proper course was not to strike out the Appellant’s Defence, but allow the action to proceed whereby the Appellant’s failure to have or produce such documents, and his credibility, would be matters of evidence at trial proper.

(d) Her Honour erred in law in finding there was a failure by the Appellant to comply with a procedural requirement (or order of the Court) by failing to produce certain documents for inspection, once she had found that such documents did not exist and it was impossible for the Appellant to produce the same.

(e) Her Honour erred in that she should have found that the Appellant, in the facts and circumstances that truly existed, had complied so far as possible with the requirements for production of the documents the subject of the Respondent’s Application.

(f) Her Honour erred in failing to take into account adequately or at all the evidence (including the undisputed affidavit of Kerenga Kua) that agreement had been reached to pay the Appellant
K690, 000.00, by way of a Deed of Settlement and Indemnity entered into between the parties hereto and that in the circumstances the Appellant was not required to provide the invoices to the Respondent as sought by the Respondent.

(g) In the circumstances, Her Honour was guided by a wrong principle of law, failed to take into account a relevant consideration, took into account irrelevant considerations and/or mistook the facts.

(h) The Judgment is wrong and should be set aside."

Error

19. When dealing with the complaint concerning the appellant’s failure to give discovery of the invoices, Her Honour said:

"No doubt, the defendant’s inability to produce invoices is because he did not issue them. He was under an obligation to have kept invoices as records of the liquidation. He has not. Which (sic) means he did not issue any." (AB, page 274, line 10).

20. The argument raised by grounds (a) to (e) of the notice of appeal is in essence that once Her Honour concluded that the invoices did not exist, it was an error to then order the defence to be struck out for not discovering the documents. 

21. The appellant submits that an appellate court may overturn a discretionary judgment if there was some error. An error exists when, for instance, the primary judge acts upon a wrong principle, or allows extraneous or irrelevant matters to guide or affect him, or fails to take into account some material consideration: Bean v Bean [1980] PNGLR 307. He argues that Her Honour considered irrelevant matters, ignored relevant matters or applied wrong principles of law as once the Court had made a finding that the invoices did not exist it was a mistake to strike out the defence for failure to give discovery of the same non-existent invoices. 

22. We agree with the appellant that Her Honour erred in her finding that the invoices did not exist as there was no factual basis for her to make such a finding. The appellant had never stated that he did not issue the invoices. He had always maintained that he issued the invoices and that he would discover them. He verified a list of documents to that effect and consented to Court orders requiring him to produce the invoices but he did not produce them. Though Her Honour’s finding is in error, given the other evidence that was before Her concerning the appellant’s conduct as to discovery of the invoices, we are of the view that Her Honour’s exercise of the discretion under O 9 r 15 of the National Court Rules to strike out the defence was in the circumstances proper and appropriate. 

23. The appellant raised the issues of the Deed of Release (ground f) and the application of irrelevant considerations or of wrong principles of law (grounds g & h) in the notice of appeal. With respect to the Deed of Release, we are of the view that it has no relevance to the question of discovery. We agree with Her Honour that the appellant was required by law to maintain the invoices as part of the records of the liquidation for seven (7) years. 

24. As for grounds (g) and (h), the central argument for the appellant in the National Court was that in the absence of a notice to produce pursuant to O 9 r 9 (1) of the National Court Rules by the respondent, the appellant was not required to produce anything including the invoices (Aisip L Duwa v Ronald Moyo Senge [1995] PNGLR 140. We agree with Mr. Brookes of counsel that Her Honour correctly dismissed this argument. In POSF Board v Sailas Imanakuan (2001) SC 677, the Supreme Court held that there is no pre-condition that a Court order for discovery must first be sought before commencing a default action.

Costs on an indemnity basis

25. The respondent has asked for costs of the appeal on an indemnity basis. There is no provision in the Supreme Court Rules for costs. However, pursuant to sections 6 (2) and 8 (1)(e) of the Supreme Court Act, the Supreme Court has the same powers, authority and jurisdiction as the National Court as to costs: Don Polye v Jimson Sauk Papaki & Electoral Commission [2000] PNGLR 166; Public Curator v Bank of South Pacific Ltd (2006) SC 832; William Moses v Otto Benal Magiten (2006) SC 875. 

26. In William Moses v Otto Benal Magiten (supra), the Supreme Court said:

"10. The application before the court raises the issue of the Supreme Court’s power to award costs and make orders that a judgment be entered on costs. There is no law, equivalent to Order 22 of the National Court Rules, which expressly authorises the Supreme Court to award costs or that regulates taxation of costs or enforcement of costs orders by the Supreme Court. The Supreme Court Act (Chapter No 37) and the Supreme Court Rules are generally silent on the issue (though the Act alludes to costs in Sections 5(1)(d) and 35). This is significant as the power of a court or tribunal to award costs must be conferred by statute. It is not part of a court or tribunal’s inherent powers (Thiess Bros (Pacific) Pty Ltd v Chief Collector of Taxes [1982] PNGLR 385, Supreme Court, Kidu CJ, Pratt J, Bredmeyer J).

11. However, the Supreme Court decided in a previous case that its power to award costs is an ordinary part of the exercise of its judicial functions and that there is a provision of the Supreme Court Act which, in effect, gives the Supreme Court the same powers as the National Court in regard to costs. The case is Don Pomb Pullie Polye v Jimson Sauk and Electoral Commission (1999) SC651 (Sheehan J, Sawong J, Jalina J). The provision the court relied on was Section 8(1)(e) (supplemental powers of Supreme Court), which states:

‘For the purposes of this Act, the Supreme Court may, if it thinks it necessary or expedient in the interests of justice to do so … exercise in relation to the proceedings of the Court any other powers that may for the time being be exercised by the National Court on appeals or applications.’ 

12. The Court stated:

‘Making orders for costs is part and parcel of the Court's ordinary jurisdiction. The Supreme Court Act and Rules do make some provision for cost orders in specific circumstances, though Section 35 of the Act which sets out to provide for the ‘power of the Supreme Court to impose terms as to costs,’ fails to do so. The section is anomalous and reflects an error in drafting.

The Rules of the National Court by contrast in Order 22 clearly spell out the breadth of that court's jurisdiction to award appropriate costs. And to the extent that Section 8(1)(e) of the Supreme Court Act reflects the Supreme Court's general authority to make any order the National Court may make, Order 22 is relevant in these proceedings.’ 

13. We agree with their Honours’ reasoning and the conclusion reached: Order 22 of the National Court Rules should be used as a guide to the powers, practice and procedure of the Supreme Court regarding costs. That position is reinforced by Section 6(2) of the Supreme Court Act (appeal to be by way of rehearing), which states:

‘For the purposes of hearing and determining an appeal, the Supreme Court has all the powers, authority and jurisdiction of a Judge exercising the jurisdiction of the National Court.’"

27. In Island Helicopter Services Ltd v Wilson Sagati (2008) N3340, Injia DCJ (as he then was) reviewed the cases on the subject and said:

"4. The purpose and effect of O 22 r 65(1) was considered by the Supreme Court in Polye v Sauk [2000] PNGLR 168. The Court adopted the principle stated by Sir John Donaldson M.R in the English case of Orchard v Southern Electricity Board [1987] QB 565, that the discretion conferred by this jurisdiction must be ‘exercised with care and discretion and only in the clear cases.’ The test is stated in other cases as ‘only in rare and exceptional cases,’ or ‘in special circumstances’ or ‘in special and unusual aspects of the case’: P.C.R.Z. Investments Pty Ltd v National Golf Holdings Ltd & Anor (2002) VSCA 24, Austrim Nylex Ltd v Knoll and Ors (No.3) (2002) VSC 290. 

5. In Polye v Sauk, the Supreme Court also applied the English House of Lords decision in Myers v Elman [1940] AC 282 and the English Court of Appeal decision in Holden & Co v Crown Prosecution Service [1990] 2 QB 262 which state that whilst a wasted costs order is mostly compensatory, it is also an act of discipline and therefore punitive. The Supreme Court adopted the three stage test for the exercise of the jurisdiction set out in the English Court of Appeal decision in Ridehalgh v Horsefield [1994] 3 All ER 848, as follows:

(1) Has the legal representative of who complaint is made, acted improperly, unreasonably or negligently?

(2) If so, did such conduct cause unnecessary costs?

(3) If so, is it in all the circumstances just, to order the legal representative to compensate any party to proceedings for the whole or any part of the relevant cost.

6. In the Canadian Court of Appeal (of New Brunswick) case of Sirois v Centennial Pontiac Buick GMC Ltd and General Motors of Canada Ltd (1988), 89 N.B.R. (2d) 244, the Court adopted a passage from Okin, The Law of Costs (2nd Ed. 1987), at pages 2 – 61 and 2 – 62 which sets out a useful summary of different types of cases which warrant an order for costs on lawyer-client, as follows:

‘An award of costs on the solicitor-and-client scale, it has been said, is ordered only in rare and exceptional cases to mark the court’s disapproval of the conduct of a party in the litigation. Orders of this kind have been made where a litigant’s conduct has been particularly blameworthy, for example, where there were allegations of fraud or impropriety either proven or abandoned at trial; or wanton and scandalous charges; or allegations of perjury; or collusion; or where the responsible party perpetrated a fraud on the court, e.g., by preparing and presenting forged documents; or by filing a deliberately deceptive affidavit in support of an order without notice; or by concealing a document until trial and then relying on it; or prolonged the trial by engaging in obstructionist tactics; or brought motions without merit to exhaust an opponent’s resources; or intentionally misled the court by giving false evidence as to material facts; or in contempt proceedings. Solicitor-and-client costs have been awarded to a successful party where an action was without any foundation in law, or where an appeal was considered to be without merit; and in a libel action where fault was admitted, only the amount of damages being contested; or in an action for indemnification by an insured against his insurer where the insurer, in refusing to settle a personal injury claim had not used reasonable care for the protection of its insured, acted in bad faith and the plaintiff ought not to have had to bring an action.’

7. There are many cases in the National Court and Supreme Court in which costs have been awarded on lawyer-client basis in different kinds of cases. These include the following: 

(a) Abuse of Court process by invoking Court’s review jurisdiction without reasonable cause by pursuing an hopeless application: Polye v Sauk [2000] PNGLR 168; the application for review was filed without basis at all, it was mischievous, unmeritorious and a clear abuse of process: PNG Waterboard v Gabriel M Kama (2005) SC 821; or by bringing a proceeding which is vexatious and abuse of Court process: Gulf Provincial Government v Baimuru Trading Ltd [1998] PNGLR 311, Jacob Sarapel v Fred Kulumbu (2003) N2405. 

(b) Running a defence case on complete lack of defence, the claim could be settled but which was delayed by the defendant and as a result, caused the plaintiff unnecessary litigation and expenses: POSF Board v Sailas Imanakuan (2001) SC 677; or the defendant took a position at the trial when it had no basis on the facts or the law: Benny Balepa v Commissioner of Police (1994) N1374; or where the defendant’s conduct in terminating the plaintiff’s contract of employment was harsh and oppressive, the defendant had no good defence to the claim, the claim could be settled but the plaintiff was put to unnecessary expense in litigating the claim: Peter Aigilo v Morauta (2001) N2102; or defending a claim by a charitable organization on complete lack of defence: Salvation Army (PNG) Property Trust v Ivar Jorgenson and Rex Vagi (1997) N1644; or wanton, deliberate and unprovoked wrongful assault by the defendant: Alex Latham and Kathleen Marie Latham v Henry Peni [1997] PNGLR 435; 

(c) Wilful and deliberate defiance of Court Order: Bishop Brothers Engineering Pty Ltd v Ross Bishop (1989) N705. 

(d) The respondents’ lawyers failed to appear at the hearing of an Appeal: Willie Mel v Coleman Pakalia (2005) SC 790; Mision Asiki v Manasupe Zurenuoc (2005) SC 797." (Emphasis added)

28. The award of costs on an indemnity basis is discretionary. An order for costs on an indemnity basis may be made where the conduct of a lawyer or a party to the proceedings is so improper, unreasonable or blameworthy that he should be so punished by such an order. The question is whether the conduct of the appellant in this matter is such that it caused the respondent to incur unnecessary costs.

29. It is clear to us that the appellant was attempting to avoid giving discovery; the refusal was repeated, chronic and designed to conceal the true state of affairs. He was evasive and dishonest. He gave different reasons for not producing the invoices. He said copies of the invoices were available for inspection at Namaliu & David Lawyers, that the originals were in archives at Korobosea, that the copies on his computer have been lost because the computer crashed, that copies have been misplaced and he needed time to locate them, that copies were available at MVIL or at the offices of Mr. Kerenga Kua, a lawyer. He did not give discovery despite agreeing to Consent Orders of the National Court requiring him to produce the invoices for the entire period of the liquidation. Two (2) years after he verified a list of documents, the appellant was still looking for copies of the invoices. In fact, he never gave discovery. He was required by law to retain the accounts and records of the liquidation for seven (7) years (section 306 (1)(b) of the Companies Act). We agree with Mr. Brookes that the actions of the appellant have caused the respondent an enormous amount of wasted time, effort and money. We are of the view that the conduct of the appellant was improper, unreasonable and blameworthy.

30. Accordingly, we make the following orders:

1. This appeal is dismissed;

2. The decision of Davani J. to strike out Mr. Paki’s defence in proceedings WS No. 658 of 2002 is upheld;

3. Pursuant to Order 9 Rule 15 of the National Court Rules judgment is entered for MVIL for damages to be assessed, plus interest and costs;

4. Mr. Paki shall pay the costs of MVIL in respect of the National Court proceedings; and

5. Mr. Paki shall pay the costs of MVIL of these appeal proceedings on an indemnity basis, including any hearing as to quantum. 

____________________________________
Gadens Lawyers: Lawyers for the Respondent
Steeles Lawyers: Lawyers for the Appellant