HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 138 of 1994

LUXTON JOVERE

-V-

JACOB MAKOTO (REPRESENTATIVE) OTHERS
AND NORTH NEW GEORGIA TIMBER CORPORATION

High Court of Solomon Islands
(Lungole-Awich, J)

Date of Hearing: 4 August 2000
Date of Judgment: 9 August 2000

Ms Tongarutu for the Applicant/Plaintiff
Mr J Apaniai for the First Respondent/First Defendant
Mr Katahanas for Second Respondent/Second Respondent

JUDGMENT

(Lungole-Awich, J): This case has returned to me for the determination of yet another interlocutory application. It has returned to do rounds for the second time, and will be for the third time before two other brother judges. When I delivered judgment on 18.11.1996 granting leave to the defendants (now respondents) to appeal to the Court of Appeal against interlocutory judgment dated 14.8.1996, of my learned brother Palmer J, I expressed the view that it would have been better to keep all interlocutory applications in the case before one judge. By that time interlocutory hearing had taken place at least twice before my learned brother Muria, the Chief Justice, and twice before learned Palmer J. I hope the case will finally be kept before only one of us. 

The case commenced as long ago as 1994. There have been long time lapses between pleadings. No certificate of readiness for trial has yet been filed. I would have thought that it is time the plaintiff speeded up the proceeding to trial stage.

The Application

In this application the plaintiff, Mr Luxton Jovere, has, by summons dated 30.5.2000, filed on 20.6.2000, applied for orders of this Court to strike out the amended defence dated 18.5.2000, of the second respondent, the North New Georgia Timber Corporation, and to have judgment entered against the said second respondent. That is what I understand proposed orders 1 and 2 of the application to mean. Proposed order 3 which also asks for judgment to be entered, seems to be independent of and in the alternative to 1 and 2. Proposed order 3 appears to be proposed order in an application for summary judgment on the ground that the defence, if not struck out because of late filing, is so hopeless in law so as to be no defence at all. For better understanding of what I have stated, I set out the summons application here:

"SUMMONS

LET ALL Parties concerned attend before the Judge in Chambers on the 10 day of July 2000 at 9:30 O'clock in the forenoon for the hearing of an application on the part of the Plaintiff for the following Orders:-

1.	That the Second Defendant's Statement of Defence dated 18th May 2000 and filed on the same date be struck out.

2.	That judgment be entered against the Second Defendant in default of defence or, 

3.	That judgment be entered against the Second Defendant in that of defence to this action.

4.	That the Plaintiff's costs and expenses in connection with this action to be paid by the second defendant.

5.	Such other orders at this Honourable Court sees fit.

6.	Costs of and incidental to this application to be borne by the second defendant.

Dated this 30th day of May 2000.

ANT LEGAL SERVICES
Solicitor for the Plaintiff"

Determination: Proposed Alternative Order

The submission of learned Counsel Ms Tongarutu for the applicant, in support of proposed alternative order 3 to strike out the amended defence on the ground that the contents afforded no defence in law, was grounded on the argument that the second respondent is a corporate person and therefore is unable to plead defence based on customary right over customary land. There is no basis in law for the argument. The second respondent is required under the North New Georgia Timber Corporation Act, Chapter 43 in the Statute Laws, to pay money, the proceeds of its logging operation, to persons in the North New Georgia area, who are entitled according to the Act. The entitlement of those persons is based on their claim to customary right over specific areas of land. The applicant's substantive case is that he should be paid certain monies by the second respondent because the applicant has customary right over the land in question, in the North New Georgia area. He has complained that the second respondent has wrongfully paid the first respondent. By any logic, it must follow that the second respondent is entitled to plead facts against the basis of the applicant's claim. I do not know, and Ms Tongarutu has not cited any rule of law which disqualifies corporations from relying on defence based on customary right. The second respondent, in its amended defence, has pleaded customary right of those to whom it has paid money as the basis for the payment it has made. It has pleaded the defence so as to meet the claim that it has paid money to the wrong people, how on earth, can that be so untenable so as to be no defence? The Court of Appeal has discussed the law about untenable defence in, Golden Springs Limited and North New Georgia Timber Corporation Limited -v- Warren Paia SICOA No. 19 of 1998 and Leslie Allison -v- Monique Medlin SICOA No. 7 of 1996. See also Australian case, General Steel Industries Inc. -v- Commissioner of Railways (NSW) (1964) 112 CLR 125.

The submission of Ms Tongarutu considered in the preceding paragraph was stated in the affidavit of the applicant at paragraphs 2, 3, 4 and 5. Learned Counsel Mr Katahanas for the first respondent, has asked the Court to strike out those paragraphs from the affidavit because the contents were arguments and conclusions of law, not permissible in affidavit. According to the rule about contents of affidavit, Mr Katahanas was right - see Order 40 rule 3 in the High Court (Civil Procedure) Rules. It, however, serves no purpose now for me to formally strike out the arguments and conclusions; they have also been presented as arguments and conclusions properly where they belong in the submission of Ms Tongarutu, the submission I have now rejected.

Determination: Proposed Orders 1 and 2

Much was said in support and in opposition to the main proposed orders 1 and 2, to strike out the amended defence of the second respondent because of late filing and to enter default judgment. The facts fished out of the rather large number of papers do not warrant much argument about the law at issue. What learned counsel Mr James Apaniai for the second respondent, submitted was enough to resolve the application, even at the stage of discussion between solicitors without coming to Court. Mr Apaniai cited, Steven Lethy and Obed Siako -v- Nathaniel Luluku, Gwendylene Abana, Commissioner of Lands and Registrar of Titles HC-CC No. 104 of 1996, to support his submission. I accept his submission. I rephrase in my own words the correct rule which Mr Apaniai submitted to Court. It is this: In the normal course of proceeding, default by a defendant to enter appearance (file memorandum of appearance) or file defence within the time limited in the writ of summons or Rules, does not mature into default judgment against the defendant unless the plaintiff has acted to enter judgment because of the default, before the defendant has filed late memorandum of appearance or late defence. Even if the time limited has elapsed, the plaintiff must file default judgment before the defendant has filed appearance or defence in order to obtain default judgment. The rule does not stop the defendant filing appearance or defence outside the time limited, thereby correcting his default, provided the plaintiff has not filed default judgment - see Steven Lethy and Obed Siako -v- Nathaniel Luluku and Others, cited above and English cases, Gill -v- Woodfin (1884) 25 Ch. D.707 CA and Gibbons -v- Strong (1884) 26 Ch. D. 66 CA. That is the interpretation that one must give to the expression, "the plaintiff may, at the expiration of such time, enter final (or interlocutory) judgment," which appears in Orders 13 and 29 of the Rules. There are good practical reasons for the rule, especially in regard to filing defence. For examples; the defendant may inform the plaintiff that the defendant needs time to consider settlement, he may start genuine negotiation for settlement which may fail after the expiration of the time limited, or the defendant may advise that he needs to obtain certain evidence or study voluminous papers, especially in commercial cases, before framing defence. The defendant may consider it not necessary to apply to court for enlargement of time if he raises those matters with the plaintiff and the plaintiff appears to agree to allow the defendant more time.

I have to explain that to enter default judgment, the practice in Solomon Islands is that the plaintiff files application for default judgment, the Registrar grants or disallows the default judgment, if granted the judgment is sealed and entered on the register.

The defence of the second respondent which the applicant sought to have struck out was an amended one dated and filed on 18.5.2000. On 27.10.1998, the Court of Appeal had ordered that this case which had gone on appeal, be remitted back to the High Court and directed "that the parties clearly and precisely plead their entitlement under custom in accordance with O21 r30 of the High Court (Civil Procedure) Rules." Subsequently the applicant filed amended statement of claim on 2.9.1999 and delivered copies to both the first and second respondents. Both respondents have filed amended defences; that of the second respondent is now the subject of this application for orders to strike out.

Ms Tongarutu has argued that the direction order of the Court of Appeal applied only to the applicant and the first respondent because the matter to be pleaded concerned customary right. I have already given the reason why her argument based on customary right cannot be accepted. I add that the appeal was an appeal by both the first and second defendants (respondents in this application), if the Court of Appeal meant to exclude the second defendant (second respondent now) from complying with the direction order, the Court would have stated so.

When a statement of claim is amended after a defendant has responded to the original statement of claim by filing a defence, as was in this case, there cannot arise any occasion for default in filing defence any more, unless the court, on granting leave to have the statement of claim amended, has directed that amended defence be filed or be filed within a specified time limit. In the absence of court order so directing, the defendant may elect whether to amend his defence or have his original defence already filed deemed the defence to the subsequently amended statement of claim. That is the rule in O30 r5 which states:

"5. Where any party has amended his pleading under Rule 2 or 3 or this Order, the opposite party shall plead to the amended pleading, or amend his pleading, within the time he then has to plead or within fourteen days from the delivery of the amendment whichever shall last expire; and in case the opposite party has pleaded before the delivery of the amendment, and does not plead again or amend within the time above mentioned, he shall be deemed to rely on his original pleading in answer to such amendment,"

Counsel did not cite to Court that relevant and important rule in determining this application.

In this case both respondents elected to file amended defences. They were required by rule 5 to file the amended defences within 14 days as no time limit was included in the direction order made by the Court of Appeal. The second respondent did not file its amended defence within 14 days. It was in default, but as I said earlier, its default could not mature into default judgment unless the applicant had filed application for default judgment before any late defence was filed. The applicant did not file his default judgment application before the amended defence of the second respondent was filed late, so the late amended defence of the second respondent stands as good defence. 

Discretion in Default Judgment

I need to mention here that granting default judgment is a matter that court has discretion in - see Charles -v- Shephard [1892] 2 QB 622. It is an exercise of the coercive power that court invokes to enforce Rules of Practice, but court may, for good reason, choose not to wield the power. Even if I were to find that there had been default by the second respondent, I would have exercised discretion to refuse to grant leave to enter default judgment in this case because there would be the potential of injustice when the case against the first respondent is finally decided. Injustice would be occasioned to the second respondent in the event that the Court finally decides that the first respondent and not the applicant is the rightful recipient of the monies paid and to be paid by the second respondent. The applicant would have already had a default judgment in his favour unjustly requiring the second respondent to pay the applicant who, after all, will not be the rightful recipient. 

Application Dismissed

The application fails on both the main and the alternative grounds. The main and alternative proposed orders are refused. The application is dismissed. Costs are granted to both the first and second respondents. Although the applicant did not ask for order that the amended defence of the first respondent be struck out, he was served with the application, and he felt bound to attend the hearing so as to protect his interest in the case that he has been joined in as a defendant and now a respondent.

Direction Orders 

Given the long time the case has been pending in Court, it is appropriate that I now make some direction orders aimed at speeding up the case. Any reply intended by the applicant following the amended defences now filed, must be filed and served within 14 days. Rejoinder, surrejoinder, rebutter, surrebutter or any further pleading must now be by leave of Court obtained from the Registrar. The plaintiff must after 14 days, but not later than 21 days, apply to the Registrar for direction order hearing under O32. Before the direction order hearing, the applicant must prepare a bundle of case papers so far filed and intended for use at the final hearing, the bundle is to be produced to the Registrar at the direction order hearing. It will of course be expanded depending on what will be ordered in the direction orders. The preceding direction order has become necessary because the papers on the case file are in utter disarray. An early date of hearing must, among other matters, be considered at the direction order hearing.

Delivered this Wednesday the 9th day of August 2000
At the High Court
Honiara
Sam Lungole-Awich
Judge