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GRP & Associates Ltd v HBS (SI) Ltd [2025] SBHC 50; HCSI-CC 305 of 2024 (26 March 2025)

HIGH COURT OF SOLOMON ISLANDS

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 305 of 2024

BETWEEN:

GRP & ASSOCIATES LIMITED
Claimant

AND:

HBS (SI) LIMITED
Defendant

Date of Hearing: 4 March 2025
Date of Decision: 26 March 2025

Ms Sheena Kilua for the Claimant
Mr Rodney Kingmele for the Defendants

RULING ON COST

Bird PJ:

1. The claim by GRP & Associates Limited (Claimant) is a straight forward money claim against HBS (SI) Limited (Defendant). By clause 5 of a Deed of Settlement between the parties dated 20 August 2024, the Defendant should have settled its debt to the Claimant on or before 10 December 2024.
2. The Defendant settled the last instalment payment of USD$250,000.00 on 6 December 2024. By operation of clause 25.3 of the Deed, the Claimant should have taken all necessary steps to discontinue the proceeding. In particular, the Claimant should have handed over to the Defendant a notice of discontinuance in exchange for the final instalment payment.
3. By email dated 6 December, counsel for the Defendant send a copy of the payment advice of the last instalment payment to counsel for the Claimant. He reminded them of their client’s obligation under clause 25 (3) of the Deed.
4. By response email dated 11 December, counsel for the Claimant referred to clause 10 of the Deed on the issue of cost and enclosing a bill of cost totalling $85,659.50. On 12 December, a reviewed bill of cost for $238,839.50 was further sent.
5. It was then made obvious that parties had an issue of cost. They have different views and interpretations in relation to clauses 10 and 25 (3) of the Deed. That issue has dragged from December until the matter was mentioned again on 5 February 2025. On that date, no one from Rano and Company appeared to represent the Claimant. There was no explanation from their office of their absence. I was informed by Mr Kingmele that the issue of cost was still unresolved. He has not received any further update from Mr Rano. The proceeding was adjourned to 20 February.
6. On that date, Mr Kingmele appeared. Mr Rano made no appearance. There was still no explanation for his absence. I was informed by Mr Kingmele that he contacted Mr Rano the day before and he was assured by Mr Rano that he will deal with the issue. Mr Kingmele indicated to court that his client will be asking for cost for time wasted. The proceeding was further adjourned to 27 February.
7. On the 27^th, Ms Kilua appeared on behalf of Mr Rano. She told me that a Consent Order was in the process of being finalised and a Notice of Discontinuance will be filed. Proceeding was further adjourned to 4 March 2025 at 9.30am in order for that process to be done.
8. During the mention on 4 March 2025, the Consent Order has yet to be finalised and filed in court. A Notice of Discontinuance was also not filed. I directed that Ms. Kilua to file and serve a Notice of Discontinuance by close of business that day. It is noted that the Consent Order was filed at 1.22pm on 4 March after the matter was adjourned. The proceeding was further adjourned to 5 March. It is also noted that the Notice of Discontinuance was filed.
9. On 5 March, the issue of cost was raised. Mr Kingmele was ready to argue it. Ms Kilua asked for further time to file a response sworn statement from her client. It was already in draft form and ready for filing. I directed Ms Kilua to file and serve the sworn statement by 6 March, because the longer the proceeding is delayed the value of cost increases by the day. I fix the issue of cost for hearing on 10 March.
10. On 10 March, the matter was ready to be argued. Ms Kilua requested an adjournment on the basis that the Claimant has requested Mr Rano to personally deal with their case. Mr Rano was indisposed. Mr Kingmele objected to the application. The requested adjournment would increase cost, which will not be in the best interest of the parties.
11. Taking into account the requirements of rules 1.3, 1.4 and 1.5 of the Solomon Islands Courts (Civil Procedure) Rules 2007 (CPR), I refuse to grant the application for adjournment and proceeded to hear arguments from counsel.
12. Mr Kingmele argues that the relevant clause to be applied pursuant to the execution of the Deed of Settlement by the parties on 20 August 2024 is clause 25.3. Clause 10 is only relevant and applicable if there is any default by the Defendant as per the terms provided for under clause 5 therein.
13. In this instance, the Defendant has not defaulted. The last instalment payment was to be paid on 10 December 2024. The Defendant settled it on 6 December, about 4 days before the due date. Clause 9 provides for consequences of default in payment. Clause 10 relates directly to clause 9 and therefore is not applicable.
14. In fact, the Claimant has an obligation to perform the requirement of clause 25 (3) of the Deed. In general, clause 25 deals with post-settlement obligation. Clause 25-3 specifically deals with termination of legal proceeding upon settlement. The Claimant has failed to perform their obligation therein.
15. Apart from the above arguments, Mr Kingmele also brought to my attention the effect of the Consent Order perfected on 16 September 2024. By paragraph 3 of the order, parties have consented to bear their own cost.
16. Ms Kilua on the other hand relies upon the sworn statement of Constance Hemmer filed on 6 March 2025. Ms Hemmer still maintains their interpretation of the Deed and that they are entitled to their cost on indemnity basis. She also stated in paragraph 14 that their lawyer maintained that clause 10 allows for recovery of costs.
17. She further stated that there were various reasons that led to late filing of the Notice of Discontinuance. The delays were not deliberate or due to any misconduct on their part. The delays were a result of administrative issues and circumstances that were beyond their control. The Defendant’s application for cost must therefore be dismissed and the court should be minded to grant them their cost upon a broader interpretation of clause 10.
18. There is no issue that the Defendant owes the Claimant a substantial amount of money. A Deed of Settlement was executed. The Deed provided for the duties and obligations of the respective parties. It also provide for consequences for default. In this case, the Defendant has not defaulted in its obligations. In fact, the last instalment payment was settled prior to the settlement date.
19. Consequent to the above facts, I am of the view that the terms in clause 10 of the Deed cannot and should not have been invoked by the Claimant. Any claim for cost by the Claimant under those circumstances is not viable. I am further of the view that in order to give effect and meaning to clause 10, it should be read together with clause 9. The effect of these two clauses will lead me to a safe conclusion that clause 10 can only be invoked by the Claimant if the Defendant was in default of payment under clause 5 therein. It does not apply in this instance.
20. Clause 25 provides for the Claimant’s obligations post settlement. Clause 25 (3) is specific on legal proceeding. The opening sentence of that clause reads “in exchange of full and final payment of the settlement sum”........., the Claimant shall hand over to the Defendant a consent order and a Notice of Discontinuance.
21. Clause 25 (3) (a) has been complied with by the Claimant by virtue of paragraph 1 of the Consent Order perfected on 16 September 2024. Clause 25 (3) (b) has not been complied with until 4 March 2025. A period of about 2 months and 28 days has lapsed before compliance was complete.
22. It is my respectful view, the use of the word ‘shall’ in clause 25 (3) makes it mandatory for the Claimant to fulfil its obligations upon receipt of the final payment of the settlement sum. They have received payment on 6 December 2024. They have failed to carry out their mandatory obligation under clause 25 (3) (b) of the Deed.
23. The underlying reason for them to neglect their obligation under clause 25 (3) (b) was their issue of cost under clause 10. In paragraph 19 above, I have concluded that clause 10 is not available to the Claimant and should not be invoked. If the Claimant and their counsel have properly perused and interpret clause 10 of the Deed, they should have never raised any issue of cost. This proceeding could therefore be finalised on 6 December 2024 in exchange of a Notice of Discontinuance.
24. I do not wish to further discuss and dwell on any subsequent reasons relied upon by the Claimants. The new filing system administered by the court currently, only came into effect in mid-January 2025. If a Notice of Discontinuance was filed way back in December 2024, further cost for attendance by the Defendant would not have been incurred. In effect, I have noted in the court file, on 3 December 2024 that the proceeding was adjourned to 5 February 2025 for a Notice of Discontinuance to be filed by the Claimant upon final payment of the settlement sum. If that direction was complied with by the Claimant, the proceeding should have closed. For two consecutive mentions on 5 and 20 February 2025, no one appeared for the Claimant. There was also no update or explanation from them.
25. In relation to the Defendant’s argument on the effect of the Consent Order perfected on 16 September 2025, that order is only limited to costs incurred to the date of the order. With that order in place, the Claimant will not be entitled to any cost from commencement of this proceeding to 16 September 2024. I have noted from pages 16 and 18 of the sworn statement of Santy Chrysanthina that the Claimant bill of costs were from 7 April 2024 to 10 December 2024.
26. The above position is totally absurb in light of paragraph 3 of the Consent Order perfected on 16 September 2024. I wish to conclude that lawyers should be vigilant when dealing with legal issues affecting their clients. With sound and proper legal advise, this proceeding should never have reached this stage. It could have been amicably settled in December 2024. The court file could have been closed on 5 February 2025 when it was called for mention.
27. In light of my above discussions, I hereby order indemnity cost against the Claimant and Rano & Company jointly to be taxed if not agreed by the Registrar.

THE COURT
Justice Maelyn Bird
Puisne Judge