COURT OF APPEAL OF SOLOMON ISLANDS

Civil Appeal Case Number 6 of 2003

Mega Corporation Limited

v.

Margaret Lotinta

Court of Appeal of Solomon Islands
(Palmer JA.)

Date of Hearing: 9th July 2003
Date of Judgement: 14th July 2003

P. Tegavota for the Applicant
B. Upwe for the Respondent

Palmer J: At a hearing before me in the High Court on 7th February 2003 I was informed by learned Counsels Tegavota for the Defendant/Applicant (“Applicant”) and Ashley for the Plaintiff/Respondent (“Respondent”) that they had agreed on a consent order and that it would be filed later. Later that same day, a consent order (hereinafter referred to as “the Consent Order”) was filed which stated inter alia as follows:

“That unless the Defendant files and delivers its List of Documents within 7 days, its Defence will be struck out and Judgement entered for the Plaintiff on her Statement of Claim”

On 21st February 2003, the Respondent filed a summons seeking orders inter alia for the Defence of the Defendant to be struck out and for Judgment to be entered on her Statement of Claim. I heard the Summons on 10th March 2003. 

Mr. Tegavota for the Defendant sought to argue that Order 33 Rule 21 which was the foundation for the peremptory order (Consent Order) gives discretion to the Court in any event whether to have the Defence struck out or not. Unfortunately learned Counsel did not cite any case authorities in support of his submissions. Learned Counsel also submitted that the court was obliged to consider the reasons for the delay. He pointed out also the fact that the Defendant had complied with the “Unless Order” despite it having filed its List of Documents after the due date; that delay was not inordinate, it was filed 17 days late and that it was not inexcusable. Learned Counsel pointed out that he had good reasons for the delay: (i) after the hearing on 7th February 2003 he was approached by a “representative” of the Plaintiff to try and have the matter settled out of court, which led to him trying to get in touch with his client if such arrangement was possible, this naturally took time; (ii) relevant documents needed could not be located in time; (iii) he had difficulty communicating with his client as he resided overseas. These had the combined effect of delaying his attempts to comply with the “unless order”. 

In my judgment of 11th March 2003 in Civil Case 291 of 2002 I applied the test adopted in Felix Ano Suva’ahu, George Kiriau Noa v. Omex Limited, Commissioner of Forest Resources and Others and Peter Taniana & Others v. QBE Insurance International Limited which was to ask the question whether the judgement or order made finally disposed of the rights of the parties (this was the test propounded in Bozson v. Altrinchan Urban District Council). I held that the court was functus officio by virtue of the terms of the Consent Order, that the court did not have any discretion and that the defence stood dismissed on 15th February 2003 (7 days after the requirement to file List of Documents had expired). 

The Applicant now comes to this Court (Judge sitting alone for purposes of this application) under section 11(2)(e) of the Court of Appeal Act (Cap. 6) for leave to appeal against the orders of the High Court issued on 11th March 2003, which were for the Defence to be struck out and for judgment to be entered against the Applicant. The Application for leave was filed on 19th March 2003 within the fourteen days period required under Rule 10(2) of the Court of Appeal Rules.

Three grounds have been relied on as providing the basis for leave to be granted. They read as follows:

“1. The learned trial judge erred in law in failing to exercise his discretion under Order 33 rule 21 of the High Court (Civil Procedure) Rules in considering whether or not the defendants defence be struck out or not for failure to comply with the consent order dated the 7th February 2003 and had the said trial judge exercised his discretion under the said rule, he would have accepted the appellant’s reasons for the delay and would not have ordered its defence be struck out.”

2. The learned trial judge erred in law in ruling that the consent dated the 7th of February 2003 had removed the court’s discretion in the matter contrary to Section 77(1) of the Constitution.

3. The learned trial judge erred in law in ruling that the interlocutory order of 7th February 2003 was a final order that justified the striking out of the appellant’s defence.”

Order 33 Rule 21 of the High Court (Civil Procedure) Rules 1964 (“the Rules”) provides as follows:

“If any party fails to comply with any order to answer interrogatories, or for discovery or production or inspection of documents, he shall be liable to attachment. He shall also, if a plaintiff, be liable to have his action dismissed for want of prosecution, and, if a defendant, to have his defence, if any, struck out, and to be placed in the same position as if he had not defended, and the party interrogating may apply to the Court for an order to that effect, and an order may be made accordingly.”

The Applicant submits that rule 21 of Order 33 of the Rules and section 77(1) of the Constitution, gives the court discretion to exercise regarding the issue whether the defence should be struck out for failing to comply with the terms of the Consent Order of 7th February 2003 and thereby to extend the time required for compliance. In saying that it had no discretion to exercise regarding the effect of the Consent Order, the court committed an error of law, which resulted in an erroneous and unjust decision being made. Again learned Counsel did not cite any authorities to support his submissions.

Submissions of the Respondent

In his submissions opposing the application for leave, Mr. Upwe relied on three case authorities. The first case authority relied on was Siebe Gorman Ltd v. Pneupac Ltd. This case was relied on for the meaning of the word “consent” as relating to a contract between the parties, which is binding. The Court cannot interfere in exercising its discretion to extend or enlarge time, which has expired except on the same grounds as any other contract.

“One meaning is this: the words “by consent” may evidence a real contract between the parties. In such a case the court will only interfere with such order on the same grounds as it would with any other contract. The other meaning is this, the words “by consent” may mean the parties hereto not objecting. In such a case there is no real contract between the parties.”

The second case relied on was Far East Enterprise Ltd v. Martin Tsuki. The proposition relied on in that case was that the effect of a consent order is that the court will not ordinarily unilaterally vary or revoke a consent order on one party’s application without the consent of the other. The facts in that case entailed a consent order issued on 9th July 2001 in which it was ordered: “That unless the Plaintiff within 14 days file its Reply to Defence and Defence to Counter-Claim, the Writ and Statement of Claim of will be struck out”. Plaintiff failed to comply and as a consequence the Registrar of High Court entered a default judgment on 1st August 2001 striking out the Plaintiff’s Writ and Statement of Claim. Plaintiff then filed Notice of Motion to have the Judgment in Default set aside under Order 29 Rule 12 of the Rules and Order 64 rule 10. In his judgment his Lordship Kabui J. took account of what was said in Wilding v. Sanderson per judgment of Byrne J at pages 543-544 in which his Lordship said:

“A consent judgement or order is meant to be the formal result and expression of an agreement already arrived at between the parties to proceedings embodied in an order of the Court. The fact of its being so expressed puts the parties in a different position from the position of those who have simply entered into an ordinary agreement. It is, of course, enforceable while it stands, and a party affected by it cannot, if he conceives he is entitled to relief from its operation, simply wait until it is sought to be enforced against him, and then raise by way of defence the matters in respect of which he desires to be relieved. He must, when once it has been completed, obey it, unless and until he can get it set aside in proceedings duly constituted for the purpose.”

His Lordship Kabui J. refused to have the consent order set aside.

The third case Felix Ano Suva’ahu Kiriau Noa v. Omex Limited, Commissioner of Forests Resources and Others entailed a Consent Order in which the Plaintiffs undertook to expeditiously prosecute their respective actions in the Malaita Local Court for the determination of ownership of customary land in dispute, failing which the Defendant was at liberty to apply to the Court to have the Statement of Claim struck out. The Consent Order was dated 2nd June 2000. On 19th August 2000 the first Defendant filed application to have the Statement of Claim struck out. On 5th October 2000 an order striking out the statement of claim was issued. The Plaintiff was not present at the hearing and so applied under Order 38 rule 7 of the Rules to have the Orders of 5th October 2000 set aside. The case was determined on the basis of a final order applying the test in Bozson v. Altrinchan Urban District Council:

“It seems to me that the real test for determining this question ought to be this: Does the judgment or order as made, finally dispose of the rights of the parties? If it does, then I think it ought to be treated as a final order; but if it does not, it is then in my opinion, an interlocutory order.”

The court held that “… the Order was final because the Plaintiff had agreed in advance to the real possibility that such an order could be made against him and his rights, if any, be thereby denied and the rights of the Defendants be thereby vindicated thus bringing to an end the dispute between them in the High Court.”

Mr. Upwe also objected to leave being granted on the grounds that even if there was a discretion that the discretion could only be exercised if there was a mistake, fraud or misrepresentation alleged when the Consent Order was made – Siebe Gorman Ltd v. Pneupac Ltd (ibid).

The Issue

The issue for determination is simple; whether the court has discretion to extend the time limits set for the List of Documents to be filed under the Consent Order, in particular in the context of an “unless order”. The view held by the cases cited was that in the case of a peremptory order (“unless order”), once the time limit set had expired, that that brings the action to an end. The Court has become functus officio and has no discretion to exercise, virtually saying that it has no jurisdiction to deal with the question of extension of time. To that extent such orders amount to a final order; the only way out is to file an appeal.

The Law

The position of the law in this jurisdiction regarding the correct application and effect of an “unless order” to some extent has been uncertain. The position of such orders in the United Kingdom until about 1977/1980 was also in a state of confusion. Roskill LJ in Samuels v. Linzi Dresses echoed those sentiments:

“The question whether where an “unless order” has been made and the time is allowed to run out without that order being properly complied with, further extensions of time can be granted has been a vexed one in recent times.”

His Lordship traced the origins of the view that the effect of an “unless order” was to bring an action to an end to the case of Whistler v. Hancock which entailed an order issued under RSC Ord 29 r1 dismissing an action for want of prosecution unless a statement of claim should be delivered within a week. The Plaintiff failed to comply within the week. A summons was taken out to extend time; this was allowed by the master but reversed by Fry J. holding that the master had no jurisdiction to make such order for extension of time. The Plaintiff appealed to the Divisional Court and Cockburn CJ held:

“This is a very plain case. The defendant obtained an order that unless the statement of claim were delivered within a week the action should be at an end. The plaintiff took out a summons to set aside the appearance, and he could have obtained an order to that effect before the week was out, he would have been the victor; but before his summons could be heard he fell under the operation of the order dismissing the action, and the action was at an end. It cannot be contended that the taking out of a summons to set aside the appearance in the meantime could keep the action alive after the period when by the operation of the master’s order it was defunct. For these reason, I think the master had no jurisdiction, and the order of Fry J. was right.” 

This decision was followed in Wallis v. Hepburn holding that “there had been no jurisdiction to make the order in question, ‘the action being then dead …”. There then followed numerous other decisions: King v. Davenport and Script Phonography Co Ltd v. Gregg in which the decision in Whistler v. Hancock (ibid) was followed. In Script Phonography Co Ltd v. Gregg (ibid) North J in giving judgment said:

“It appears to me that the cases of Whistler v. Hancock and King v. Davenport, and cases like them, have settled the law on the point in which is now before me.”

He concluded:

“I do not see how I can set up a dead action, and I must dismiss this application, with costs.”

That position however did not stay unassailed for long. The clear hint that it was going to be overruled came as a bold attack by Lord Denning in R v. Bloomsbury and Marylebone County Court, ex parte Villerwest Ltd:

“I have one further observation to make. It is about Whistler v. Hancock. It seems there to be suggested that if a condition is not fulfilled the action ceases to exist, as though no extension of time can be granted. I do not agree with that line of reasoning. Even though the action may be said to cease to exist, the court always has power to bring it to life again, by extending the time. In my opinion, the county court judge had ample jurisdiction to make the order he did.”

Whilst the other two law lords Geoffrey Lane L.J. and Roskill L.J. did not express any views about Whistler v. Hancock the effect of their decision was more or less the same; they held that the court had inherent jurisdiction to extend the time. The view which had been held and followed for sometime by the English Courts as expressed by the decision in Whistler v. Hancock was that if an application for extension of time was not made and heard before the time limited by the order had expired, the only remedy was to appeal from the order dismissing the action. This had also been the view on this subject as demonstrated by the numerous cases cited in this jurisdiction.

The view by the English Courts however has undergone a dramatic change since about 1980 when the Court of Appeal in Samuels v. Linzi Dresses made plain that the decision in Whistler v. Hancock should no longer be followed and went on to state what the law should now be regarding an “unless order”:

“Today the position is very different. There are many decisions of this court and of course there is the decision of the House of Lords in Birkett v. James, as to the principles which should be applied in striking out claims for want of prosecution. One principle now clearly established is that the court will not, generally speaking, strike out a claim for want of prosecution where a plaintiff is free to issue a fresh writ. In the instant case the defendants would be free, if their counterclaim were struck out, to issue a fresh writ covering the matters raised by the counterclaim. There would be no issue of estoppel or res judicata.

Accordingly, it seems to me quite wrong that today a claim should be struck out simply because of these decisions now a century old. I think the judge in the present case, and Judge Fay in the earlier case to which I have referred and, if I may say so, Lord Denning MR in the Villerwest case, were all correct in taking the view that Whistler v. Hancock should no longer be followed.

To say that there is jurisdiction to extend the time where an “unless” order has been made and not complied with is not to suggest, let this be absolutely plain, that relief should be automatically granted to parties who have failed to comply with the orders of the court otherwise than on stringent terms either as to payment of costs or as to bringing money into court or the like. Orders as to time, and in particular as to the time for the delivery of pleadings and particulars, are made not to be ignored but to be complied with. In the present case, long before the problem caused by the 1978 Christmas holidays arose, there had been serious delay in complying with various orders, and the defendants were at mercy when they came before Judge Hawser. They had not done that which they ought to have done. They were not, save perhaps at the very last moment, deserving of any sympathy. But at the last moment they had made a real effort to comply with the order and they were perhaps unlucky that their efforts did not meet with success.

In my judgment, therefore, the law today is that court has power to extend the time where an “unless” order has been made but not been complied with; but that it is a power which should be exercised cautiously and with due regard to the necessity for maintaining the principle that orders are made to be complied with and not to be ignored. Primarily it is a question for the discretion of the master or the judge in chambers whether the necessary relief should be granted or not.”

The other law lords Lawton L.J. and Sir Stanley Rees agreed with the judgment of Roskill L.J. Lawton L.J. went further to point out that the view held in Whistler v. Hancock regarding the effect of an “unless order” as bringing an action to an end was no longer appropriate. He took the view that contrary to what had been said, the litigation was not dead but very much alive; it was still to continue. Note, Lord Denning in the Villerwest Case (ibid) had suggested that even if the case had ceased to exist – was dead or defunct, “the court always has power to bring it to life again, by extending the time”.

In the case of Bacal Contracting Ltd v. Modern Engineering (Bristol) Ltd the approach taken in Samuels v. Linzi Dresses (ibid) was followed. Since then later cases have re-affirmed the approach taken by the Court of Appeal in Samuels v. Linzi Dresses. In Re Jokai Tea Holdings Ltd it was held where “the court has to decide what are the consequences of a failure to comply with an “unless order”, the relevant question is whether such failure is intentional and contumelious. The court should not be astute to find excuses for such failure since obedience to orders of the court is the foundation on which its authority is found. But if a party can clearly demonstrate that there was no intention to ignore or flout the order and the failure to obey was due to extraneous circumstances, such failure to obey is not to be treated as contumelious and therefore does not disentitle the litigant to rights which he would otherwise have enjoyed.” (see also Grand Metropolitan Nominee (No. 2) Co. Ltd v. Evans in which the approach above was affirmed and applied).

Order 33 Rule 21

Order 33 rule 21 provides as follows:

“If any party fails to comply with any order to answer interrogatories, or for discovery or production or inspection of documents, he shall be liable to attachment. He shall also, if a plaintiff, be liable to have his action dismissed for want of prosecution, and, if a defendant, to have his defence, if any, struck out, and to be placed in the same position as if he had not defended, and the party interrogating may apply to the Court for an order to that effect, and an order may be made accordingly.”

Rule 21 allows a plaintiff inter alia, to apply to have the defence of the defendant struck out for non-compliance with any order to answer interrogatories, or for discovery or production or inspection of documents. The principles under which the court may exercise its jurisdiction in the above rule have been laid down in Allen v. McAlpine and Birkett v. James. These have been summarized as follows: (i) that the default has been intentional and contumelious, eg disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court; or (ii)(a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third party. In the absence of the above grounds the court most likely will not strike out defence. 

Confusion in this jurisdiction appears to have been engendered through the application and use of “unless orders” on the basis that they amounted to final orders and that accordingly the matter was at an end; that such orders also described as “guillotine orders” render a judge’s jurisdiction in the matter as defunct. Unfortunately that cannot be the case in the light of the case authorities cited above. The jurisdiction of the court in my respectful view is retained by Order 64 rule 5 under the Rules and its inherent jurisdiction retained by section 77(1) of the Constitution. Order 64 rule 5 is in the following terms:

“Subject to any provisions to the contrary in these Rules the Court shall have power to enlarge or abridge the time appointed by these Rules, or fixed by an order enlarging time for doing any act or taking any proceeding, upon such terms as the justice of the case may require, and any such enlargement may be ordered although the application for the same is not made until after the expiration of the time appointed or allowed: Provided that when the time for delivering any pleading or document or filing any affidavit, answer or document or doing any act is or has been fixed or limited by any of these Rules or by any direction on or under the summons for directions or by any order of the Court the costs of any application to extend such time and of any order made thereon shall be borne by the party making such application unless the Court shall otherwise order.”

The terms of Order 64 rule 5 couldn’t be clearer. The court retains jurisdiction to enlarge or abridge time even when the application is not made until after expiration of the time appointed or allowed. That must necessarily include an “unless order”; the court does not become functus officio even after the expiration of such an order! But even if it might be held that Order 64 rule 5 does not apply to an “unless order”, the court retains inherent jurisdiction in interlocutory proceedings to extend time (see Keyner v. Reddy; Pole-Carew v. Western Counties Manure Co. Ltd.; R. v. Bloomsbury and Marylebone County Court, ex p. Villerwest Ltd). In the context of this case, the inherent jurisdiction of the High Court is derived from section 77(1) of the Constitution (note this forms ground (2) of the appeal of the Applicant in this case) which gives “… unlimited original jurisdiction to the High Court to hear and determine any civil or criminal proceedings under any law and such other jurisdiction and powers as may be conferred on it by this Constitution or by Parliament.” The object of the rule is to give the court a discretion to extend time with a view to the avoidance of injustice to the parties (Schafer v. Blyth; Saunders v. Pawley).

Contrasted with a final order

An “unless order” is not the same as a final order. It may have the effect of a final order but it is not the same thing. A final order or judgment generally speaking is one over, which a previously existing liability of the defendant to the plaintiff is ascertained or established (Re Chinery, Ex parte Chinery). The test on “final orders” has been generally accepted as that stated in Bozson v. Altrincham Urban Council:

“It seems to me that the real test for determining this question ought to be this: Does the judgment or order, as made, finally dispose of the rights of the parties? If it does, then I think it ought to be treated as a final order; but it does not, it is then, in my opinion, an interlocutory order.”

This test has been approved by the Privy Council in Haron Bin Mohammed Zaid v. Central Securities (Holdings) BHD and also by the High Court of Australia in Hall v. Nominal Defendant. It has also been applied in this jurisdiction in numerous cases; Felix Ano Suva’ahu, George Kiriau Noa v. Omex Limited, Commissioner of Forest Resources and Others; and also in Peter Taniana & Others v. QBE Insurance International Limited.

The true foundation of the test is to consider the effect of the judgment or the order (Isaacs & Sons v. Salbstein). When pitted against the effect of an “unless order” it could be argued that the effect is similar. Unfortunately whilst that may be so, the position as stated in Samuels v. Linzi Dresses Ltd (supra) and Birkett v. James (supra) have demonstrated that an “unless order” is not to be regarded as a final order in that an “unless order” spells out the consequences of failure to comply with its terms of which disobedience is likely to be held to be contumelious behaviour resulting ultimately in the dismissal of the action or striking out of defence. It is not a bar to the exercise of the jurisdiction of the court whether or not in the circumstances to extend time for compliance or not, or to strike out defence and have the action dismissed. The court retains discretion whether to strike out defence or not, and where judgement in default has been summarily entered, it retains discretion to consider whether it should be set aside or not under Order 29 rule 12 and to extend the time limit for compliance under Order 64 rule 5.

What should be done?

Where there has been a failure to comply with an “unless order” the defaulter may apply under Order 64 rule 5 for extension of time. The court retains jurisdiction to deal with such application and to consider whether extension of time should be granted or not. Where an application to have the defence struck out is made (as in this case), again the court retains jurisdiction to deal with such application and not as was done in this case to hold that the court’s jurisdiction is at an end and defunct. The court has discretion to exercise whether to grant the application or not. 

Decision of the Court

It being clear from the case authorities that the court retains jurisdiction to deal with any applications for extension of time even in the case of an “unless order” or to determine any application on whether a default judgment may be set aside or not, and it being clear that in the judgment of the High Court of 11th March 2003 in Civil Case 291 of 2002, it was held that this court had no jurisdiction and therefore no discretion to exercise, I am satisfied there is a clear arguable case in law for granting leave to the Applicant to file an appeal in this matter as raised in all three grounds for leave.

But for the orders of this court in its judgment of 11th March 2003, the appropriate course that could have been taken apart from a consent order would have been for the Plaintiff to apply in the normal way under Order 29 rule 12 to have the said judgment in default set aside.

Orders of the Court:

1.	Grant leave to appeal.
2.	Costs in this application to be borne by each party.

The Court.