HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 294 of 1997

ROSS MINING (SI) LTD & GOLD RIDGE MINING LTD

V

WILLIE RONI & DAVID THUGUVODA

In the High Court of Solomon Islands
(F. O. Kabui, J)

Hearing: 6th November 1998
Judgment: 11th November 1998

Andrew Radclyffe for the 1st Plaintiff & 2nd Plaintiff
Akuila Talasasa for the 1st Defendant & 2nd Defendant
Gerard Nash for the Applicants (Third Party)

(Frank Kabui J): By an ex parte summons filed in the High Court on 31st July 1998, the First and Second Defendants (the Defendants) sought the following orders:-

1.	That leave be granted to serve Slater and Gordon Solicitors of 533 Little Lonsdale Street Melbourne in the State of Victoria, Australia with a copy of the Third Party Notice filed herein.

2.	That leave be granted to serve Denis Reinhardt of 38 Eldernell Terrace Hamilton Queensland Australia with a copy of the Third Party Notice filed herein.

3.	That leave be granted to serve a Third Party Notice outside the jurisdiction on Denis Reinhardt of 38 Eldernell Terrace Hamilton Queensland Australia.

4.	 That Denis Reinhardt be served with a copy of the Statement of claim, Defence and Amended Defence filed herein.

5.	Cost in the cause.

They did not cite the appropriate order or rule under which their application was being made but it is understood that they did that under order 11, rule 1 as read with order 18, rule 1 of the High Court (Civil Procedure) Rules, 1964 (the High Court Rules). The Registrar of the High Court heard this application in Chambers and granted the Orders sought by the Defendants in the terms set out in that ex parte Summons. This application was supported by two affidavits sworn and filed by the Defendants on 31st July, 1998. They deposed that they had received legal advice from Slater & Gordon who were introduced to them by Denis Reinhardt. They also deposed that Denis Reinhardt had paid for the cost and expenses in relation to their case against Ross Mining and given advice on matters relating to the issue of press statements and writing letters to the shareholders of Ross Mining. They also further deposed that Denis Reinhardt had organised the press Conference at the Melbourne premises of Slater & Gordon from which the article which appeared in the Melbourne Age was based. The order sought and the statement of claim accompanying the application for leave and the grounds upon which the order was being sought were also filed with the exparte summons. The order sought and the statement of claim are in these terms:-

Statement of Claim to Accompany Application for Leave

The following statement is given pursuant to the Application.

Order Sought

The Defendants seek leave:-

1.	To serve Slater and Gordon Solicitors of 553 Little Lonsdale Street Melbourne in the State of Victoria, Australia with a copy of the Third Party Notice filed herein.

2.	To serve Denis Reinhardt of 38 Eldernell Terrace Hamilton in the State of Queensland, Australia with a copy of the Third Party Notice filed herein.

The defendants claim against Slater and Gordon Solicitors and Denis Reinhardt to be indemnified against the plaintiffs’ claim and the costs of this action or contribution to the extent of all of the plaintiffs’ claim.

3.	For service of Third Party Notice outside the jurisdiction on Denis Reinhardt 38 Eldernell Terrace Hamilton in the Street of Queensland, Australia.

Grounds upon which order is sought

1.	The Defendants rely on their affidavits filed in this Court on 9 June 1998 wherein they depose as to the circumstance relating to their instruction to and the conduct of the case by their previous legal advisers, Slater and Gordon.

2.	The Defendants received legal advice from Slater and Gordon who were introduced to them by Denis Reinhardt.

3.	Denis Reinhardt was responsible for paying expenses in relation to the case and gave them advice relating to matters including issuing of press statements and writing letters to shareholders of Ross Mining. The said Denis Reinhardt was responsible for organising the press conference at the Melbourne premises of Slater & Gordon upon which the article appearing in the Melbourne Age of 9 December 1997 was based.

The application was duly granted by the Registrar on the terms requested. The orders were signed and perfected on 3rd August, 1998. The Orders granted are in these terms.

Order

Upon hearing counsel for the defendants and reading the affidavits filed herein IT IS ORDERED as follows:

1.	That leave be granted to serve Slater and Gordon Solicitors of 553 Little Lonsdale Street Melbourne in the State of Victoria, Australia with a copy of the Third Party Notice filed herein.

2.	That leave be granted to serve Denis Reinhardt of 38 Eldernell Terrace Hamilton Queensland Australia with a copy of the Third Party Notice filed herein.

3.	That leave be granted to serve a Third Party Notice outside the jurisdiction on Denis Reinhardt of 38 Eldernell Terrace Hamilton Queensland Australia.

4.	That Denis Reinhardt be served with a copy of the Statement of claim, Defence and Amended Defence filed herein.

5.	Cost in the cause.

As a result of these Orders, a Third Party Notice was signed on 3rd August, 1998 by Mr Talasasa, Counsel for the Defendants, and filed in the High Court that same day. The Third Party Notice is in the following terms:-

THIRD PARTY NOTICE

Issued pursuant to the order of the Registrar in Chambers, the 3rd day of August 1998.

To Denis Reinhardt of 38 Eldernell Terrace Hamilton in the State of Queensland Australia.

TAKE NOTICE that this action has been brought by the plaintiffs against the defendants. In it the plaintiffs claims against the defendants damages for loss of reputation and exemplary damages as appears in the Statement of Claim a copy thereof is delivered herewith.

The defendants claim against you to be indemnified against’ claim and the costs of this action or contribution to the extent of all of the plaintiffs’ claim.

AND TAKE NOTICE that if you wish to dispute the plaintiffs’ claim against you, you must cause an appearance to be entered for you within fourteen days after service of this notice upon you.

In default of your entering such appearance, you will be deemed to admit the plaintiffs’ claim against the defendants and the defendants’ claim against you and your liability to indemnify the defendants against damages and costs and the validity of any judgment that may be given in the action and you will be bound by such judgment and such judgment may be enforced against you pursuant to Order 18 of the Rules.

A similar Third Party Notice was also signed and filed in respect of Slater and Gordon. The Orders together with the Third Party Notice, the affidavits and the statement of claim were served upon Mr Ashley of A & A Legal Services by Mr Talasasa that same day also. A second exparte summons was filed by the Defendants on 18th August, 1998 seeking leave to amend the orders granted on 3rd August, 1998. The amendment was sought in these terms:-

1.	That leave be granted to serve Slater and Gordon Solicitors of 533 Little Lonsdale Street Melbourne in the State of Victoria, Australia with a copy of the Third Party Notice filed herein.

2.	That leave be granted to serve Denis Reinhardt of 38 Eldernell Terrace Hamilton, Queensland Australia with a copy of the Third Party Notice filed herein.

3.	That leave be granted to serve a Third Party Notice outside the jurisdiction on Slater and Gordon Solicitors of 533 Little Lonsdale Street Melbourne in the State of Victoria Australia.

4.	That leave be granted to serve a Third Party Notice outside the jurisdiction on Denis Reinhardt of 38 Eldernell Terrace Hamilton Queensland Australia.

5.	That Denis Reinhardt be served with a copy of the Statement of claim, Defence and Amended Defence filed herein. 

6.	Cost in the cause.

The amended orders were signed and perfected on 18th August 1998 Subsequently, the following documents were served on Slater and Gordon on 19th August, 1998 by placing them in the reception offices of Slater & Gordon lawyers, namely,

(i)	The Third Party Notice issued on 3rd August, 1998;

(ii)	The statement of claim;

(iii)	The Defence;

(iv)	The Amended Defence.

Dennis Reinhardt was also served that same day by sending copies of the said documents by pre-paid ordinary mail at his address in Queensland. Denis Reinhardt entered a conditional appearance through Mr Ashley of A&A Legal Services on 19th August, 1998. Slater & Gordon did the same on 21st August, 1998. At a preliminary hearing on 25th August, 1998, the matter was adjourned to give an opportunity to Slater & Gordon and Denis Reinhardt to prepare their case.

Application to Set Aside

Slater & Gordon and Denis Reinhardt (the Applicants) have now come to the court by summons dated 8th September 1998 and asking it to set aside the Third Party Notice served upon them and the orders of the 3rd and 18th August 1998. The grounds for their application is that the said Third Part Notice was not served in accordance with the High Court Rules and secondly, the Court did not have jurisdiction to grant leave for service out of jurisdiction of the High Court of Solomon Islands. That is to say, the Court does not have Jurisdiction to make the Orders it made on the 3rd and 18th August, 1998.

The Applicants’ Case

The arguments for the Applicants are set out in a written outline produced to the court by Mr Nash, Counsel for the Applicants. These submissions have now formed part of the court record because Mr Nash’s oral submissions were the same as those in his written submissions. Mr Nash’s first point is that under Order 18, rule 1 of the High Court Rules, the Court can only grant leave to issue and serve a Third Party Notice if there is a cause of action for contribution or indemnity against any person not already a party to the action. He says Order 18, rule 2 requires the Third Party Notice to state the nature and grounds upon which the Defendant’s claim is based as well as the extent of any remedy claimed. He argues that the grounds set out in the statement of claim in support of the exparte summons in this case have fallen short of these requirements. In other words, the grounds set out in the said statement of claim do not reveal any cause of action. He says the said statement of claim says nothing more than the factual background from which the statement of claim arises. Mr Nash refers to paragraphs 2, 3 and 4 of the affidavit of David Thuguvoda (one of the Defendants) of 31st July, 1998 filed in the High Court that same date as being nowhere near a cause of action. These paragraphs are in these terms:-

2.	In these proceedings I rely on my affidavit filed in this Honourable Court on 9 June 1998 wherein I depose as to the circumstances relating to my instructions to and the conduct of the case by my previous legal advisers, Slater & Gordon.

3.	I received legal advice from Slater & Gordon who were introduced to me by Denis Reinhardt. I was not provided with legal advice by Charles K Ashley, the Town Agent of Slater & Gordon.

4.	Denis Reinhardt paid costs and expenses in relation to the case and gave me advice relating to matters including the issuing of press statements and writing letters to shareholders of Ross Mining. He organized the press conference at the Melbourne premises of Slater & Gordon upon which the article appearing in the Melbourne Age of 9 December 1997 was based.

These paragraphs are about the contact and conversations of David Thuguvoda and Willie Roni had with Denis Reinhardt and about payment of expenses and giving of legal advice to the Defendants. Mr Nash says even paragraphs 80, 82 and 83 of David Thuguvoda’s affidavit of 9th June, 1998 whilst relevant in parts are not sufficient to constitute any cause of action. These paragraphs are in there terms:-

80. The next visit to Australia was on Sunday 30th November 1997. Willie Roni and Alfred Maeke accompanied me. We spent the night at the Metro Inn. A car had been booked for us. Alfred was now leader of the delegation. Denis and Alfred were by now in business. Denis saw me in my room. He said he was happy I was back it was good because I would lose money if I left. We were given spending money I said I was sorry about the timber business. Reinhardt no longer recognized me. We went on to Melbourne the next day and went to the office of Slater & Gordon. We stayed in Melbourne. Denis came down on the Tuesday. Willie and me had to give Marita an affidavit to rejoin. Marita drafted the affidavit during discussions. In response to propositions put I gave her answers she wanted to hear because she needed particular assertions for them to apply to have the discontinuance struck out. She was telling me the type of things she needed to hear and for to swear to give the application a chance for success. She wanted information to support the assertion that I was pressured, tricked or frightened into making the settlement. The affidavits were sworn on 2 December 1997. The affidavit was drafted to in an endeavour to make up grounds to set aside the settlement, I am sorry to say, and Nick, Denis and Marita knew it was.

82. A press conference was to be arranged with a journalist. Denis was also in Melbourne. Nick, Denis, Alfred and Willie and myself went to the conference room to discuss the future of the case. I said that I was disappointed to reopen the case. I said that I would have no responsibility. Alfred was the new Chairman, and the name of the association was changed to Gaobata Land Resources Association. I said that for me to rejoin the case I would need some protection because I had lost any chance of developing a new business and Alfred had replaced me in the small timber sales I had with Denis etc. I said I need something.

Denis said:

“Don’t worry you will each receive good money, a special payment of $200,000 for the case on top of the settlement.”

The currency was not mentioned. This was to be paid at the end of the case. After Nick and Denis went out of the room the 3 of us discussed what we would do. Willie and Alfred said we should ask for $50,000 up front. Then Nick and Denis came back. We told Denis that we would like $50,000 before we could go on. We wanted $150,000. Denis said that is OK, I will pass it on to Nick. Nick will have to give the decision. I said to Denis that I needed $7,000 to clear an outstanding debt. After speaking to Nick he informed us that $50,000 could not be paid. However, it was agreed that $7,000 would be paid into my overdraft account. It was also agreed that Willie would be paid SI$3,000 per month. The $7,000 was sent by telegraphic transfer to Alfred who paid me. I received this on Wednesday 10 December 1997.

83. We had a press conference on Tuesday 2 December 1997. Present were Willie and myself. Denis and Alfred were in another room. The journalist was given a copy of the affidavits of Willie and myself. he referred to it and asked questions. The meeting took about an hour or a little less. We were together for the conference and I helped Willie interpret a little. We were taken to the Supreme Court to be photographed on Wednesday 3 October 1997. 

These also are about David Thuguvoda’s contact and conversations with a Slater & Gordon’s personnel and Denis Reinhardt. In other words, there is no evidence whatever of any agreement for contribution or indemnity so as to constitute a cause of action. In my view, this argument is fundamental to the Applicants’ case for if the court finds that there is no cause of action in favour of the Defendants, then all other points about the granting of leave and service of the Third Party Notice would become totally irrelevant. That is to say, if there is no cause of action, then there is no case. Mr Nash points out that to be entitled to claim contribution or indemnity, there must first be a contract to that effect in writing or otherwise. He says there is no such contract in this case. He sites Speller & Co. v The Baristol Steam Navigation Company 13 Q.B.D, 96. In that case the Plaintiffs sued the Defendants for damages for loss of cargo shipped from Amsterdam to Bristol. The Vessel “Dale” was alleged to have been unseaworthy, a cause attributed to Thomas Aitkin who was resident in Scotland. The Defendants failed in their attempt to serve a Third Party Notice on Thomas Aitkin out of Jurisdiction on the ground that the Defendants had no cause of action in that there was no contract as to contribution or an indemnity. At page 101, Brett, M R said,

It seems to me that “indemnity” in the new rule must have the same meaning it had in the old rule, and that it can only apply to the case where a third person has contracted to indemnify the defendant. In the present case it is clear that there is no contract to indemnify. If the defendants’ case be true, they may probably recover the same damages against the shipowner of whom they chartered the ship as the cargo-owner may recover against them, but that is not enough to entitle them to give this third-party notice, inasmuch as to entitle them to do so there must be a contract to indemnify them.

The same view was held by Bowen, L.J., who at page 102 said,

Now by the present rule, that is Order XVI, rule 48, a defendant is only to be able to give a third-party notice when he “claims to be entitled to contribution or indemnity. In this case the defendants have no claim to contribution, nor have they any claim to indemnity as such, because they have no contract or right to indemnity as such. The mere circumstance that the damages which they may recover may probably be the same as those which may be recovered against them, does not convert either of the two contracts into a contract of indemnity.

The position is also clearly set out in paragraphs 654 and 655 at pages 448 - 449 of Halsbury’s Laws of England, Fourth Edition, volume 9, where it is stated that:

A right to contribution arises whenever a person who owes with another a duty to a third party and is liable with that other to a common demand, discharges more than his proportionate share of that duty.

The essence of the right to a contribution lies in the liability to a common demand; and where there is such a liability, the court will, subject to any contractual provision modifying or limiting any claim to a contribution, make an assessment of contribution.

A common liability being the essence of the right of contribution, no such right against one tenant in common existed in favour of the other tenant in common of a house, who had spent money on proper and reasonable repairs. So, where a plaintiff and defendant hold separate underleases derived from one original lease, and the plaintiff has paid rent to the superior landlord under threat of distress upon the premises of both, he is not entitled to sue the defendant for his proportion of the rent so paid as money paid to his use; and the position is the same where the plaintiff is assignee of part of the premises comprised in the lease and the defendant is sub-lessee of another part, for the defendant being merely a sub-lessee could not have been sued by the lessor. Where, however, both the plaintiff and defendant are assignees of separate parts of the premises comprised in the lease, and the plaintiff has paid the whole rent, he can recover contribution from the defendant.

Such a common liability exists as between co-sureties, joint contractors, partners in an action for a general partnership account, trustees committing a breach of trust, directors who employ the assets of their company on an ultra vires undertaking, co-insurers, tortfeasors liable in respect of the same damage, or the parties to a common maritime adventure by the rule of general average.

The Evidence

I have studied paragraphs 2, 3 and 4 of David Thuguvoda’s affidavit of 31st July 1998 and paragraphs 80, 82 and 83 of his affidavit of 9th June, 1998. I can find no evidence of any contract either in writing or otherwise whereby the Applicants are under an obligation to contribute towards or indemnify the Defendants for any damages that may arise under such contract. This being the case, there is no cause of action upon which the Defendants can safely base their claim for contribution or indemnity. I am however troubled with the case of tortfeasors. Clearly the Law Reform (Married Woman and Tortfeasors) Act, 1935 of the United Kingdom would apply to Solomon Islands under section 76 as read with Schedule 3 to the Constitution. Section 6(1) of that Act does allow contribution to be recovered from any other tortfeasors as a joint tortfeasor or otherwise. The question in this case is are the Defendants and the Applicants tortfeasors in the tort of defamation. As tortfeasors, they would probably he jointly and severally liable as authors of the article published in the Melbourne Age. Again, the nearest evidence one can point to are paragraphs 2, 3 and 4 of David Thuguvoda’s affidavit of 31st July 1998 and paragraphs 80, 82 and 83 of his affidavit of 9th June, 1998. In my view, there is nothing in these paragraphs to suggest that the Applications had written the article that appeared in the Melbourne Age. There is therefore no cause of action in tort. Mr Nash’s second point is that there must be adequate evidence material before the court to satisfy it that there is an arguable case for leave to be granted under Order 11, rule 1 of the High Court Rules. He says whilst granting leave for service out of jurisdiction is a matter of discretion, the courts are always mindful of the fact that the Defendant to be served is a foreigner who owes no allegiance to the courts of the country of the Plaintiff. If no arguable case could be established by the Defendants on the evidence before the court, no leave should have been granted. This is a well established principle of law. In saying this, I have noticed that one of the orders sought by the ex parte summons of the 3rd and 18th of August, 1998 filed by the Defendants was that the Applicants be served with the Statement of Claim, the Defence and Amended Defence duly filed with the said ex parte summons. If these documents were the pleadings conducted between the First and Second Plaintiffs and the Defendants in the defamation action, they in my view, should not have been part of the evidence produced to the court at the hearing of the ex parte summons. There is the chance that they would have had the effect of adding weight and pointing to an arguable case in favour of the Defendants. As is always the case, in Third Party proceedings, the Defendants would be the Plaintiffs and the Applicants, the Defendants. In view of my concluding that the Defendants do not have a cause of action and there being no arguable case in favour of the Defendants, I need not discuss the other points raised by Mr Nash on the question of proper service of the third Party Notice. This being the case, the application to set aside by each of the Applicants is granted. The Order of the court is that the Orders of the Registrar of the 3rd and 18th of August 1998 are set aside accordingly.

I order accordingly.

Costs to be paid by the Defendants and that cost of overseas counsel is certified accordingly.

Dated this 16th day of November 1998

F. O. Kabui
Judge