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Melsul v Bule [2005] VUCA 8; Civil Appeal Case 03 of 2004 (3 May 2005)

IN THE COURT OF APPEAL OF
THE REPUBLIC OF VANUATU
(Civil Appellate Jurisdiction)

Civil Appeal Case No. 03 of 2004

BETWEEN:

EDUWAR MELSUL and TELKON WATAS
Appellants

AND:

EMILE BULE
First Respondent

AND:

NATIVE DEVELOPMENT FOUNDATION COMPANY LIMITED
Second Respondent

Coram: Hon. Chief Justice Vincent Lunabek
Hon. Justice Bruce Robertson
Hon. Justice John von Doussa
Hon. Justice Patrick I. Treston
Hon. Justice Hamlison Bulu

Counsels: Mr. Felix Laumae for the Appellants
Mr. Daniel Yawah for the Respondents

Date of Hearing: 29 April 2005
Date of Judgment: 3 May 2005

JUDGMENT

There is a preliminary issue to be decided concerning the competence of this appeal in light of section 30 (4) of the Judicial Services and the Courts Act of 2000 as amended which provides, in relation to appeals which emanate from Magistrates Court:-

“The Supreme Court is the final court of appeal for the determination of questions of fact. However, an appeal lies to the Court of Appeal from the Supreme Court on a question of law if the Court of Appeal grants leave.”

It is necessary to describe the proceedings and the events in the Court below. The Respondents in this Court commenced proceedings in the Magistrates Court in Luganville on 23^rd May 2003. They pleaded their claim as follows:-

“STATEMENT OF CLAIM

1. The First Plaintiff is a duly authorized chairman of the Native Development Foundation Company.
   
2. The Second Plaintiff is a duly registered company and can sue or be sued in its own name.
   
3. The Second Plaintiff is a company that specializes in export of kava and is owned by the people and community of South, Central and Northern Pentecost.
   
4. The Plaintiffs replace a former company called “The South Pentecost Community” now dissolved.
   
5. The owner of the South Pentecost Community does not change, nor do the objectives of the company. The only change is the name of the company now called Native Development Foundation Company that is duly agreed by owners.
   

Particulars

Agreement dated 13^th/06/2001 by Malavanua Council

Agreement dated 13^th/06/2001 by Malbangbang Council

Agreement dated 13^th/06/2001 by Takan Council

6. The Plaintiff company is entitle to the reserve fund of VT775,000 held in the account of South Pentecost Community Account which should be transferred to the Second Plaintiffs Account.
   
7. The Defendants without any authority have to this day kept the sum in another account and failed and or neglected to transfer the sum into the Second Plaintiffs trading account despite numerous request.
   
8. By reason of the Defendants conduct the Plaintiffs have suffered damages and loss of VT775,000.
   

WHEREFORE THE PLAINTIFFS CLAIM:

(i) Damages of VT775,000
(ii) Interest at the rate of 4% per annum
(iii) Cost
(iv) Any other orders deem just by the Court.”

In substance, the Respondents claimed that the Native Development Foundation Company was the successor in title to the assets of the South Pentecost Community, including the sum of VT775,000 which they alleged the Defendants were holding in trust.

The Appellants did not appear to the Writ of Summons. After an Affidavit of Service was filed, directions were given requiring the Appellants to file and serve a defence within 14 days, and the case was set down for hearing on 26 September 2002. No defence was filed.

On 26 September 2002 there was no appearance by or on behalf of the Appellants.

Order 29 of the Magistrates Court (Civil Procedure) Rules 1976 deals with the non-attendance of parties at hearings. Rule 3 reads:-

“If the plaintiff appears and the defendant does not appear when called and has not in writing previously explained to the court good reason for his absence, the court may, upon proof of service of the writ of summons, proceed to hear the cause and give judgment upon the evidence adduced by the plaintiff, or may postpone the hearing of the cause and direct notice to be given to the defendant.”

The Magistrate proceeded to hear the case, as rule 3 provides. The Magistrate made a good note of the evidence of three witnesses who were called by the Respondents in support of their case. However the Magistrate’s notes then record, simply,

“Order

I find no case for the Plaintiffs. Claim is dismissed accordingly.”

No reasons for this finding are recorded. If the Magistrate gave oral reasons for his decision there is no note or record of them. Subsequent proceedings have been conducted on the assumption that no reasons were given by the Magistrate.

The Respondents appealed to the Supreme Court against the dismissal of their claim on the ground that the Magistrate’s decision was “out rightly unfair” and that the Magistrate should have entered judgment in favour of Plaintiffs as their evidence stood unchallenged.

When the appeal came on for hearing in the Supreme Court on the first return date there was no appearance by or on behalf of the present Appellants, who were the Respondents in the court below. It is not clear whether any consideration given to whether they had been served with the Notice of Appeal. The notes of the learned Supreme Court Judge recorded that the matter was very simple, and that he agreed that the decision of the Magistrate was unfair. The learned Judge considered the unchallenged evidence of the Plaintiffs in the Magistrates Court should have been accepted, and Judgment entered for them. His Lordship considered that that evidence disclosed that there was no defence to the claim, and the Magistrate must have taken into account some irrelevant consideration to reach the conclusion which he did. The appeal was allowed. The order of the Magistrate was reversed and judgment was entered for VT775,000 against the Defendants. That happened on 28 February 2003.

On 27 May 2003 the Defendants applied to the Supreme Court Judge who had heard the appeal to have the decision of 28 February 2003 set aside on the grounds that –

1. They were not served with the Writ of Summons for the proceedings in the Magistrates Court nor the Notice of appeal against the decision of the Magistrate Court.
   
2. They had a strong defence.
   
3. Although they were at all material times residing in Port Vila, they were not aware of any proceedings taken against them by the Claimants.
   

On 4 June 2003 the Supreme Court dismissed that application and on 11 June 2003 give reasons for doing so, holding that –

• Its decision of 28 February 2003 was a final decision.
  
• In the Magistrates Court the Defendants had legal Counsel who was served with the claim and yet no defence was filed.
  
• If the matter was sent back to the Magistrates Court, costs would exceed the amount claimed which would prejudice the Claimants.
  

On 15 March 2004 the Appellants filed the Notice of Appeal now before this Court. The Notice of Appeal does not seek leave from the Court of Appeal. Without leave, under s. 30 (4) of the Judicial Services and the Courts Act, the appeal is incompetent.

When the matter came on for hearing before this Court the issue of competence was raised. The Court allowed counsel for the Appellants to seek leave to appeal, and required counsel to identify a question or questions of law which would justify the grant of leave.

Counsel identified the question of law as being that there was no evidence to support essential findings of fact that were necessary on the Respondents’ pleadings in the Magistrates Court to justify a judgment in their favour.

Whether there is evidence capable of supporting a finding of fact is a question of law. For reasons which now follow, we consider that there was no evidence to support several essential findings of fact. Without those findings of fact a judgment in favour of the Respondents cannot be maintained. In those circumstances we consider that leave to appeal should be granted on the question of law identified by counsel.

We turn immediately to the question whether there was evidence before the court that the sum of money totalling VT775,000 belonged to the three Councils of Pentecost, namely the Biltakan Kansel of Chief, the Malavanua Kansel of Chief who joined together to form the Native Development Foundation Company.

The Pleadings are not evidence. That is clear from rule 4.2 of the Civil Procedure Rules 2002. That rule says, amongst other things, that the statement of the case must set out all the relevant facts on which the party relies, but not the evidence to prove them.

Six main matters were pleaded in the claim in the Magistrates Court.

First, that the “First Plaintiff is a duly authorized Chairman of the Native Development Foundation Company.” The only evidence in the Magistrate Court and the Supreme Court is the sworn statement of the First Plaintiff in which he swore that he is “Chairman of the Native Development Foundation”. Other than that there is no evidence before the Court such as a resolution of the meeting of the Native Development Foundation Company or the three Councils, resolving that the First Plaintiff was to be the chairman.

Second, that the “Second Plaintiff is a duly registered company and can sue or be sued in its own name.” There is no evidence before the court that the Second Plaintiff is such a company duly registered under the Companies Act. There is evidence only of the registration of a business name. The evidence does not establish that the Second Plaintiff has the legal capacity to sue in its own name.

Third, that the Second Plaintiff is a company that specializes in export of kava and is owned by the people and community of South, Central and North Pentecost. There is no evidence before the court that the people of Pentecost are the owners of that company. The Agreement referred to in paragraph 5 of the Statement of Claim, now marked exhibits P1, P2 and P3, nowhere state that the people of Pentecost own the company. The documents acknowledge that the relevant councils met during the period 11/06/01 – 13/06/01 and passed certain resolutions. Some of these resolutions purported to impose obligations on the people of Pentecost from a certain age and on others who buy kava from Pentecost.

Fourth and fifth, that the “Plaintiffs replace a former company called “The South Pentecost Community” now dissolved. Again, nowhere is there evidence of the existence of the “South Pentecost Community” nor its dissolution.

Sixth, that the Second Plaintiff is entitled to the amount of VT775,000. Simply put, it was an allegation that this money belongs to the company. Paragraph 6 of the pleadings state that the “Plaintiff company is entitle to the reserve fund of VT775,000 held in the account which should be transferred to the Second Plaintiffs Account”. However, there is no evidence showing that the money actually belongs to the Native Development Foundation Company and how it could have came to belong to it.

We are accordingly of the view that the appeal must be allowed.

The Magistrate in the first hearing was entitled to conclude that in the absence of any evidence on these critical issues, even with no defence filed and no appearance from the defendants, the claimants' case had not been established. Under Order 29 Rule 3 of the Magistrates Court (Civil Procedures Rules) 1976 the Court is empowered to act but it is not required to enter a judgment in the circumstances which existed. The issues now identified in this judgment were not covered.

The appeal is allowed. The decision of the Magistrates Court is restored. The appellants are entitled to normal costs in respect of all the hearings.

Before leaving this appeal there is one further issue upon which we should comment. We noted above that the Magistrate did not give reasons for his decision to dismiss the Plaintiffs’ claim. It is an essential part of the judicial process for reasons to be given. This case demonstrates the importance of that rule. In the absence of reasons, the learned judge on appeal had a difficult task, and we have sympathy for his position. Had reasons been given, it is probable that it would have been immediately apparent to the learned judge that the claim was dismissed because the evidence led by the Plaintiff failed to establish essential factual matters. The absence of reasons has directly contributed to the matter finishing up in the Court of Appeal.

Reasons need not be elaborate. It would have been sufficient in the present case if the Magistrates had merely indicated that he dismissed the Plaintiffs’ claim because their evidence failed to establish certain of the factual issues that needed to be established, and for completeness the Magistrate could have identified those facts in a few words.

DATED at Port Vila, this 3^rd day of May 2005.

BY THE COURT

Hon. Vincent Lunabek CJ
Hon. Bruce Robertson J.
Hon. John von Doussa J.
Hon. Patrick Treston J.
Hon. Hamlison Bulu J.