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Fonua v Yeoh [2000] TOLawRp 43; [2000] Tonga LR 437 (19 December 2000)

IN THE SUPREME COURT OF TONGA

Fonua

v

Yeoh

Supreme Court, Nuku'alofa
Ward CJ
C 716/00

19 December 2000; 19 December 2000

Practice and procedure — 'unless' order not complied with — not extended

The plaintiff in this action previously brought a claim against the MBf Bank in the Supreme Court and lost (Fonua v MBf Bank Ltd [1999] Tonga LR 4). The Court found that it had been a worthless case and ordered costs on a solicitor/own client basis. The plaintiff took the case to appeal and it was dismissed (Fonua v MBf Bank Ltd [2000] Tonga LR 319 (CA)). This action was another attempt to litigate the same case. The defence applied to strike out the action or, alternatively, for security for costs. Counsel for the plaintiff insisted there were new elements in this case and he was given 14 days to file an amended statement of claim. A hearing date was set for the applications a week after the expiry of the 14 days and the amended statement of claim had not been filed. The Court gave further time but the defence asked that the question of security be heard then; the Court agreed. The basis of the application was that, not only was the case a re-run of the previous action and therefore likely to be unsuccessful, but the costs of $18,000 for the previous case had not been paid. The Court allowed further time to file the amended statement of claim and ordered that, unless the plaintiff deposited $18,000 security for costs by the next hearing date the action would be struck out. The money was not paid. Counsel for the plaintiff asked for further time.

Held:

1. There was no evidence of the extent and effect of the extraneous circumstances that prevented him complying with the "unless" order. There was also no attempt to explain why the earlier order for costs was not paid and why the plaintiff was likely to be able to pay his costs in the present action should he have been unsuccessful.

2. The plaintiff's failure to pay was intentional and deliberately ignored the order of the court.

3. The Court did not consider this a proper case to exercise its discretion to extend the "unless" order and, as the plaintiff failed to obey, the action was struck out with costs to the first and third defendants.

Cases considered:

Birkett v James [1978] AC 297; [1977] 2 All ER 801

Jokai Tea Holdings Ltd, Re [1992] 1 WLR 1196; [1993] 1 All ER 630

Samuels v Linzi Dresses Ltd [1981] QB 115; [1980] 1 All ER (CA)

Whistler v Hancock [1878] UKLawRpKQB 3; (1878) 3 QBD 83

Counsel for plaintiff: Mr Fifita
Counsel for first and third defendants: Mrs Vaihu
No appearance for second defendant

Judgment

The plaintiff in this action previously brought a claim against the MBf Bank in the Supreme Court and lost. The Court found that it had been a worthless case and ordered costs on a solicitor/own client basis. The plaintiff took the case to appeal and it was dismissed. The Appeal Court referred to the order of costs and said:

"Plainly such an order is exceptional; but this was an exceptional case. A claim of this kind causes needless expense and embarrassment, and waste of the resources that society puts into the Court. In our opinion his Honour was entitled to exercise his discretion as he did. For the same reasons, this Court dismisses the appeal with costs to be taxed as between solicitor and client."

The previous claim arose from an agreement between the plaintiff and the present second defendant. The present first defendant was the manager of the MBf bank responsible for the financing that agreement. The present action is, in essence, another attempt to litigate the same case.

Not surprisingly, the defence applied to strike out the action or, alternatively, for security for costs. Counsel for the plaintiff, however, insisted there were new elements in this case and I gave him 14 days to file an amended statement of claim. A hearing date was set for the applications a week after the expiry of the 14 days and the amended statement of claim had not been filed. I gave further time but the defence asked that the question of security be heard then. I agreed.

The basis of the application was that, not only was this a re-run of the previous action and therefore likely to be unsuccessful, but the costs of $18,000 for the previous case had not been paid.

I allowed further time to file the amended statement of claim and ordered that, unless the plaintiff deposited $18,000 security for costs in this case by the next hearing date (set in five weeks time), the action would be struck out. The money was not paid.

Counsel for the plaintiff has asked for further time. He points out that the plaintiff is owed money by clients. He is in particularly straitened circumstances at the moment because one company with whom he had a substantial contract had ceased trading. He had asked the bank for a loan to meet the security but it had refused. He asks for two more months because, he says, he is owed enough money to meet some of the security and should receive it by then. No evidence of the nature of these sums was given nor of the identity of the debtors nor of the nature or age of the debts. Like so many matters raised by the plaintiff they are vague and speculative - long on expectation and short, very short, on substance.

The defendant accepts all these matters as demonstrating the reason for their concern that the plaintiff is in fact a man of straw. I agree. It should be remembered that these actions all relate to the money ordered as security in the present action. They make no mention of the sum still outstanding for the earlier case. That has been outstanding for a long time and, if the plaintiff is as successful a business man as he would have the court believe, he would presumably have had substantial sums in his hands during that period.

Mr Fifita, for the plaintiff, points out that, even when there has been a failure to comply with an "unless" order, the court always has a discretion to allow more time. That is plainly correct and I accept the principles on that stated in Samuels v Linzi Dresses Ltd [1981] QB 115; [1980] 1 All ER (CA). However, it must still be a matter of discretion. In that case, Roskill LJ finally set the principle in Whistler v Hancock [1878] UKLawRpKQB 3; (1878) 3 QBD 83 to rest and continued:

"In my judgment, therefore, the law is that a 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 that 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."

In Re Jokai Tea Holdings Ltd [1992] 1 WLR 1196 at 1202; [1993] 1 All ER 630 Browne-Wilkinson VC confirmed the reasoning in the Samuels case and then passed on to consider the class of case described in Birkett v James [1978] AC 297; [1977] 2 All ER 801, where the delay (as it was in that case) had been intentional and contumelious. He continued:

"The basis of the principle is that orders of the court must be obeyed and that a litigant who deliberately and without proper excuse disobeys such an order is not allowed to proceed. The rationale of such penalty being that it is contumelious to flout the order of the court, if a party can explain convincingly that outside circumstances account for the failure to obey the peremptory order and that there was no deliberate flouting of the court's order, his conduct is not contumelious and therefore the consequences of contumely do not flow...

In my judgment, in cases in which 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 or 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 founded. But if a party can clearly demonstrate that there was no intention to ignore or flout the order and that 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."

The plaintiff here pleads extraneous circumstances as preventing him complying with the unless order. However, as I have stated, there is no evidence, beyond counsel's observations, of the extent and effect of those circumstances in relation to this case. Further, there is no attempt to explain why the earlier order for costs, which is understandably the prime cause of the defendants' concern in this case, has not been paid and why, therefore, the plaintiff is likely to be able to pay his costs in the present action should he be unsuccessful.

I am satisfied that the plaintiff's failure to pay is intentional and deliberately ignores the order of the court.

I do not consider this is a proper case to exercise my discretion to extend the "unless" order and, the plaintiff having failed to obey, the action is struck out with costs to the first and third defendants.