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Earthmovers (Solomons) Ltd v Thao [1998] SBHC 49; HC-CC 065 of 1997 (30 June 1998)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 65 of 1997

EARTHMOVERS (SOLOMONS) LIMITED
(Trading as Pacific Timbers)

-v-

SAMUEL THAO AND OTHERS
(Trading as Aola Timber Export Agency)

Before: Awich J.

Hearing: 23^rd June 1998
Judgment: 30^th June 1998

Mr. Charles Ashley for the Applicants/Defendants
Mr. T. Kama for the Respondent/Plaintiff

JUDGMENT

(LUNGOLE-AWICH J.): The aim of the application of the First Applicants/Defendants, Samuel Thao and Others, and Second Applicants/Defendants, Samson Maneka and Another, is to terminate the Plaintiff's case. The Plaintiff/Respondent, Earthmovers (Solomons) Limited, trading as Pacific Timbers, had commenced a case by writ of summons dated 12.3.1997, filed on 13.3.1997, in which it claimed damages against the Defendants grounded on an agreement for grant of timber rights by the Second Defendants. The application has been complicated by basing it on so many heads of law and asking for the same orders in different ways. I quote the application here:

______________________________________________________

"

NOTICE OF MOTION FOR JUDGEMENT

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LET ALL PARTIES attend before the Court on Tuesday the 23 day of June 1998 at 9:30 o'clock in the forenoon for the hearing of the First and Second Defendants [the Defendants] application for orders in the following terms:-

1. That the Plaintiffs Statement of Claim be dismissed pursuant to -

(a) Order 27 rule 4 as disclosing no reasonable cause of action or as being vexatious and an abuse of process; and/or

(b) the Plaintiff has not prosecuted its case; or

(c) the inherent jurisdiction of the Court

2. That Judgement be entered against the Plaintiff Company on the grounds that -

(a) the Plaintiff has not filed any Defence to the Defendants' Counter-Claim; and/or

(b) in the alternative, the Plaintiff has no viable Defence to Defendants' Counter-Claim.

3. That in consequence of the Judgement sought in paragraph 2 being granted, an Order that the Plaintiff pay into Court such amount of moneys as the Court deems appropriate to satisfy any Judgement obtained by the Defendants on the grounds that-

(a) The Plaintiff company, though registered in Solomon Islands, is a foreign owned company, which presently, is not carrying out any logging operation; and

(b) the Plaintiff is winding down its operations by laying off its employees and selling off its assets; and

(c) there is a real likelihood that the Plaintiff will abscond from the jurisdiction without satisfying the judgement debt.

4. That the Plaintiff pay the costs of the Defendants on an indemnity basis.

Dated the 27th day of March 1998."

It may be clearer to state the orders applied for and grounds this way:

1. That the Plaintiff's statement of claim be struck out under Order 27 r 4 for not disclosing reasonable cause of action or for being vexatious and abuse of process.

2. That the Plaintiff's case be struck out because the Plaintiff has failed to prosecute it within reasonable time.

3. That judgment be entered for the Defendants on the counter-claim on the grounds that the Plaintiff has failed to deliver defence to the counter-claim within the time limited for doing so.

4. That judgment (summary judgment), be entered for the Defendants on the ground that the defence to the counter-claim is baseless.

5. That Damages be assessed following judgment.

6. That Costs be awarded to the Defendants.

Disclosing Reasonable Cause of Action, Vexatious Case and Abuse of Process

In determining whether a reasonable cause of action is disclosed, the Court assumes that the facts averred in the statement of claim are true - see the cases of Gordon Billy Gatu - v- Solomon Islands Electricity Authority, Attorney General and Good Ridge Mining Company Limited HC. CC 59 of 1995, AG of the Duchy of Lancaster -v- London and N. W. Railway [1892] 3 Ch B278 and Saddington -v- Oliver [1993] FCA 362; (1993) 121 ALR 601. On those assumed facts the court decides whether a tenable case has been disclosed for the reliefs claimed by the Plaintiff - see Gordon Billy Gatu's case above, the case of Peter Ma'uana - v- Solomon Taiyo Limited HC CC 109 of 1997 and Willy Roni and Another -v- Ross Mining Company Limited HC CC 60 of 1997.

If the facts averred in this case are true the Plaintiff would certainly have arguable case, because he alleges that the First Defendants, by entering into a contract with the Second Defendants, interfered with an earlier contract between the Plaintiff and the Second Defendants. It further alleges that it has spent money by constructing roads which the First Defendants now use without permission. He also questions the identities of the parts of the land the subject of the case. Those contentions disclose points of law which do give rise to claim for reliefs. For the same reasons the Plaintiff's case cannot be vexatious and an abuse of court process. Of course in the final determination the facts averred must be proved by evidence, it may be that the Plaintiff may fail to prove the facts, that does not mean its case is vexatious and abuse of process or that the case does not disclose reasonable cause of action. On the facts averred, this case cannot be regarded as bound to fail.

Failure to Prosecute Case.

The ground that the Plaintiff has failed to prosecute his case cannot be based on Order 62 of the High Court (Civil Procedure) Rules because that order is intended for the Court to initiate, by summons of the Registrar, a process of striking out a case which appears to have laid dormant in court. O.62 r.1 states:

ORDER 62.
DELAY IN PROCEEDINGS.

1. Where, in any cause or matter there has been no proceeding for one year from the last proceeding heard, and neither party has, under Order 64, Rule 9, given to the other party one month's notice of his intention to proceed, the Registrar may take out a summons before a Judge in Chambers returnable in one month, directed to all parties concerned calling upon them to show cause why the action should not be struck out for want of prosecution and if, on the return day, no parties show cause to the satisfaction of the Judge why the action should not be so struck out, and on proof of service of the summons on all parties concerned, the Judge shall strike out the action accordingly.

I do not think that O.64 r.9 referred to by learned Counsel Mr. Kama for the Plaintiff, is of any assistance in the application. The rule simply requires that if proceeding has laid dormant for a year or more, the party wishing to reactivate should give one month's notice to the others. The applicants here are not seeking to proceed on with the case, they want it dismissed. Moreover, the case has not been without proceeding for one year - see the English case of Deighton -v- Cockle [1911] UKLawRpKQB 182; [1912] 1 KB 206. The Defendants application was made under the Court's inherent power to dismiss a case which the Plaintiff has brought, on the ground that the Plaintiff does not intend to proceed with - see the case of Krakaller -v- Katz [1954] 1 WLR 278.

It is true that there has been some noticeable delay in the Plaintiff proceeding with its case. It has to be noted, however, that the Plaintiff applied for interlocutory injunction order which it obtained on 27.3.1997. As part of the order, the Plaintiff has provided security for damages in cash of a rather large sum, $80,000. It appealed against part of the interlocutory order. The appeal was heard in December 1997 and the appeal judgment was delivered on 11.12.1997. I do not think that in the circumstances it is now time for the Court to dismiss the Plaintiff's case on the ground that the delay of about 6 months, amounts to failing to prosecute the case. The Defendant's application fails on that ground.

Failure to Deliver Defence to Counter-Claim.

The application that judgment be entered against the Plaintiff because it has failed to deliver its defence to the counter-claim, has some merit. O.29 r.8 provides that in an action where the claims are such as are in this case, the plaintiff may apply by notice of motion for judgment in the event that the defendant has failed to deliver his defence in the time limited in the writ of summons. The rule applies to counter-claim, but with modification - see O.23 rr.12 and 13. It is not necessary for a defendant to counter-claim to enter appearance. In this case the time limited for delivering defence was 14 days after entering appearance. The counter-claim does not state the time limited for delivering defence to the counter-claim. Were it to be a statement of claim in the case, defence would have to be delivered in 14 days, and so the defence to the counter-claim is to be delivered in 14 days - see O.23 r.13. The counter-claim is deemed the statement of claim. It was filed with the defence on 9.4.1997, and it has been conceded that it was served and 14 days have passed without the Plaintiff having filed defence to it. The Plaintiff has failed to deliver defence to the counter-claim and the Defendants are entitled to ask for judgment.

In considering granting default judgment to the counter-claim, I have, in addition to the default of the Plaintiff, considered the contents of the counter-claim. My conclusion was that the counter-claim was no more than the substance of defence to the claim of the Plaintiff. It is simply a contention by the Defendants that they had the right to use the land, the subject matter, in the way they want, including giving permission to anybody to use the land. In the counter-claim they deny agreement with the Plaintiff or giving the Plaintiff access to the land and they dispute identity of the land. The counter-claim is also a claim based on the injunction obtained by the Plaintiff on 27.3.1997. That certainly is misconceived because it is premature. The substantive case will have to be decided first. That is why security for damages is usually insisted upon when interlocutory injunction order is granted as it has been the case here, so that there is assurance that losses that may be occasioned as the result of the interlocutory injunction order are compensated for. The application of the Defendant for leave to enter judgment on the counter-claim on account of default by the Plaintiff is dismissed.

Ground that Defence to Counter-Claim is Baseless

The alternative ground of the Defendant's application that the Plaintiff has no defence to the counter-claim must fail. I have decided that the counter-claim is actually not a claim and therefore not a counter-claim, but an elaboration of defence. The application based on the counter-claim is dismissed for the same reason.

The application for judgment has failed on all the grounds, application for assessment of damages falls with it. Costs of the application is, however, granted to the Applicants/Defendants because I consider that their application was largely prompted by the slow manner in which the Plaintiff is proceeding with its case. It is now 6 months since the appeal judgment against the interlocutory order of the 27.3.1997 was delivered, the Plaintiff should have acted. It has been slow to proceed, although it has not failed to prosecute the case.

Direction Orders

It is necessary for me to make some direction orders in view of my decision that the counter-claim is actually part of the defence. It is ORDERED as follows:

1. The counter-claim of the Defendants stated together with the defence, dated 4.4.1997 and filed on 9.4.1997 is deemed part of the defence.

2. The reply and defence to the counter-claim drawn by the Plaintiff, dated 23.6.1998 and filed the same day, are deemed only a reply to defence.

3. Affidavits filed by parties are deemed part of their pleadings.

4. Unless parties agree on consent orders for direction, the Plaintiff must apply to the Registrar for direction hearing within 14 days of today.

5. Unless further order will have been made otherwise, bundle of pleadings will be filed by the Plaintiff, 14 days before the date of hearing.

6. If the Plaintiff does not apply within 4 months for a date of hearing, the Defendants may apply for a date of hearing or for dismissal, unless further order will have been made otherwise.

Delivered this 30^th day of June 1998, At the High Court,
Honiara, Solomon Islands.

Sam Lungole-Awich

Judge