IN THE COURT OF APPEAL OF SOLOMON ISLAND
Civil Jurisdiction

Civil Case Nos. 09 & 11 of 2002

BETWEEN

CHARLES ASHLEY trading as
A & A LEGAL SERVICE (a firm)
1st Appellant

AND

JAMES APANIAI and JOHN HAUIRAE 
Trading as A & H Lawyers (a firm)
2nd Appellant

AND

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
Respondents

CORAM: Lord Slynn of Hadley (President), McPherson J.A., Ward J.A.

HEARING: 3rd September 2003

JUDGMENT: Lord Slynn of Hadley

JUDGMENT

This is an appeal from a judgment of Sir John Muria CJ in which he held that the first and second appellants were liable as joint tortfeasors to pay to the respondents (The Australia and New Zealand Banking Group Limited) the sum of $76,232.17, the contribution to be apportioned on a 50:50 basis between the two appellants.

Two questions have arisen on the appeal which at the end of the day are within a narrow compass but in order to understand them it is necessary to set out the context in which they arise albeit in relatively concise form.

The appellants ("A & A" and "A & H") are respectively firms of lawyers practising in Solomon Islands.

In Case no. 103 of 2000 Ado Solomons Corporation Ltd made a claim against Lagwaeano Sawmill Logging Ltd., Solidwood Ltd and Oceanic Trading Company ("OTC") in respect of certain logging operations in Malaita Province carried on by the defendants or some of them pursuant to a management agreement which provided for the distribution of the proceeds of the logging. A & A acted for the defendants, A & H for the plaintiffs.

On 8 May 2000 an order was made by consent that the proceeds of sale of certain logs which had previously been restrained by order of the Court on 4 April 2000 be dispersed in the percentages set out in the order. In particular, OTC was to receive 57% of the proceeds of sale plus $353,028.35 as reimbursement for customs duty paid. In addition, OTC and Solidwood agreed to continue with the logging operations until all the defendants terminated the management agreement made between them; in return, Lagwaeano and four individuals (the second defendant) undertook to pay OTC and Solidwood the management and contract fees due in respect of the logging.

Substantial sums were received in respect of 4 shipments between April 2000 and March 2001. On 2 February 2001 the High Court ordered that the proceeds of the sale of 1200 cubic metres of round logs to be exported by the defendants valued at $484,000 "be not released to them but such sum to be paid into an interest bearing deposit to be held in the name of solicitors until an inter partes hearing between the parties when a varied or new order might be made.

The learned Chief Justice found that on 31 January 2001 $333,936.35 was credited to OTC's account with the bank which, together with the balance already there, made a total credit of $728,397.33. On the same day two debits each of $350,000 were made to the account, thus leaving a credit balance of $28,397.33 on 31 January 2001. On 2 February 2001 PPP Ltd made a payment of $150,000 into the OTC account, thus making a credit balance of $178,397.33.

On 5th and 6th February 2001 two cheques drawn on the OTC account respectively for $27,414.36 and $48,817.81, making a total of $76,232.17, were paid into an account opened in the joint names of A & A and A & H.

The Chief Justice found that thereafter on the instructions of the appellants, $38,182.39 were transferred to a joint IBD account and $19,000 was paid into each of the two appellant firms accounts. Subsequently, Mr Ashley said that of the $19,000 initially paid into his account, $17,000 was handed to a Mr Taege on behalf of the second defendant in Case 103/2000 to share with other members of the tribe and that a further $2,000 was handed to Sanson Defe, another of the second defendants. It was later agreed between the present appellants that the remaining $38,000 should be paid as to $19,000 each to A & A and A & H. Mr Ashley says that of the $19,000 he received he paid $2,000 to the first defendants and $5,000 to the second defendants. The remaining $12,000 were retained by him to cover monies already owed to A & A for their legal fees.

There are gaps in the evidence and some conflict as to precisely what happened to these monies which have not been resolved but one thing is clear. They were all debited to OTC's account on the instruction of the present appellants. Both firms contend that what they did was with the agreement or on the instructions of their clients.

The appellants' case is, however, all based on the argument that the $76,232.17 came out of the proceeds of the sale of the logs and that accordingly they could deal with the money in accordance with the order of the 2 February 2001.

This in the end became the principal issue before the trial judge. On any view the $76,232 had to come out of what was in the account on 5 and 6 February 2001 since the earlier proceeds of sale had already been disposed of by the withdrawals amounting to $700,000 on 31 January 2001. The monies in the account as has been seen, came from $28,397.33 still there after those withdrawals and the payment by PPP Ltd of $150,000 on 2 February. OTC said that the latter was not from log sales but was a separate loan by PPP Ltd. The judge thus had to decide whether the money had come from log sales or from the loan. On the history of the case and relationship of the parties it might have been that the monies had come from the log sales via PPP. But having heard oral evidence (particularly that of Mr Wong of OTC) and read handwritten statements, the judge concluded that "I accept that the $150,000 was money given by PPP to OTC and not proceeds from log sales".

Nothing has been said on the appeal to indicate that this finding of fact can be challenged and this Court accepts it. That still leaves the question as to whether the $28,397.33 in the account before the $150,000 was paid in, could have been shown to be from log sales. Maybe it was but the judge found that "on the evidence produced in this case the defendants have obviously failed to establish that". That again is a clear finding of fact with which this Court cannot interfere and there is certainly no record of any evidence to the contrary on either issue.

It follows as the judge found that these monies were wrongfully paid by the bank to the appellants and received by the latter out of OTC's account without authority. This as the judge found was plainly a conversion by the two appellants. The question then was whether contribution could be ordered under the Law Reform (Married Women and Tortfeasors) Act 1935, section 6 of which provides:

"Where damage is suffered by any person as a result of a tort...(c) any tort- feasor liable in respect of that damage may recover contribution from any other tortfeasor who is, or would if sued, have been liable in respect of the same damage whether as a joint tortfeasor or otherwise".

As is established by George Wimpey & Co. v BOAC [1954] 3 All ER 661 and Stott v West Yorkshire Car Co. [1971] 3 WLR 282, it is enough to show that the person claiming contribution has admitted liability or has shown that "if the claim had been fought out he would have been held responsible in law and liable to pay in whole or in part for the damage". (George Wimpey & Co. v BOAC at p.664)

In this case the bank clearly admitted that it was liable to refund the monies. In any event if sued it would have been liable to repay OTC in whole or in part its loss.
This Court considers that the Chief Justice was right in concluding that the bank was a tortfeasor entitled to claim contribution. He ordered a 50:50 division between the two firms of lawyers and that has not been challenged on appeal.

The appeal is therefore dismissed with costs and the judge's order stands.

It is in the circumstances unnecessary to consider what would have been the position of the appellants under the Court's order of 2 February '01 if the sum had been paid out of monies received from logging sales.

Lord Slynn of Hadley, President

McPherson, JA
Ward, JA