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Supreme Court of Vanuatu |
IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATUCivil Jurisdiction
CIVIL CASES No. 8, 12, & 13 OF 1997
BETWEEN:
ATTORNEY-GENERAL
PlaintiffAND:
PACIFIC INTERNATIONAL TRUST CO.,
a Company duly incorporated in the Republic of Vanuatu
DefendantAND:
DR. MICHAEL KAZACOS
C/o Juris Ozols & Associates
P.O. Box 71, Port-Vila.
Co-Plaintiff
Counsel: Mr Ishmael A. Kalsakau for the Plaintiff
Mr Garry Blake for the Defendant
Mr Juris Ozols for the Co-PlaintiffJUDGMENT
By Summons dated 13 March 1998, Mr Ozols on behalf of his client seeks for the following Orders:
1. That Dr. Kazacos be joined as Co-Plaintiff in this matter.
2. That the Defendant within seven days of the date hereof provide a full accounting of the funds held in the various accounts previously frozen.
3. That the Defendant be restrained from making any deductions from those funds except with the consent of the Co-Plaintiff.
4. That the Defendant remit these funds in accordance with the instructions of the Co-Plaintiff forthwith.
5. Such further or other orders as the Court deems fit.
6. Costs.
Brief Facts
On 19th February, 1997 the Attorney General, Plaintiff in these proceedings had obtained from this Court, restraining Orders, freezing various accounts forwarded to Vanuatu by Dr. Michael Constantine Kazacos who had interest in. The accounts are operated by the Defendant Pacific International Trust Company Limited "PITCO". Those Orders also prohibited the dealing of the accounts except for the preservation of capital and to meet costs and fees. On 24th February, 1998 and 13th March, 1998, upon being satisfied that the frozen accounts are not the proceedings of crime, the Court lifted those Orders. But, parts of the Orders of 19th February 1978 concerning confidentiality of information relating to those accounts and costs in the proceedings are still retained.
ISSUE:
The issue to be determined by this Court is whether or not Dr Michael Constantine Kazacos be joined as a party ("Co-Plaintiff") in Civil Cases Nos. 8, 12 and 13 of 1997. This means that Dr Kazacos’ joinder as Co-plaintiff in these proceedings is necessary for the complete adjudication of all the issues.
Submissions on behalf of the intended Co-Plaintiff by Mr Ozols and Affidavits in support of the Summons
Mr Ozols submitted that Dr. Kazacos be joined in these proceedings as Co-Plaintiff on the basis that the issues between the Plaintiff/Attorney General, the Defendant/PITCO and Dr Kazacos are interrelated/linked. They arose out of the same transactions. The Defendant PITCO gave some advice to the Attorney General which resulted in the freezing of his client’s accounts.
He also argued that confidential orders were made at the request of the Plaintiff, Attorney General, concerning the release of information in respect to those accounts and the question of costs is still to be resolved.
He further submitted that while Orders are on foot, to commence new proceeding would not be appropriate since Dr. Kazacos’ claim is part of these proceedings and this can be done under the rules of Court [see Order 17 rule 1 Western Pacific High Court Rules 1964 "Blue Book"].
He also seeks for Orders in parts 2, 3 and 4 as contained in the Summons.
He indeed pointed out that there are arguments as to the rights of the Defendant PITCO to deduct monies on the accounts. However, whatever costs the defendant is to pay for their Solicitors is a different matter. Once the Attorney General and Australian’s Attorney General and the Crime Authority in Australia are satisfied that the funds are not the proceeds of crime and Orders were subsequently made to lift the Orders of 19 February, 1997, Dr. Kazacos is entitled to the funds. Therefore, if the Defendant PITCO claims they have a right to costs, they have to justify.
The Affidavits of the following persons are in support of the Summons:-
(1) Affidavit of Michael Constantine Kazacos of Queensland, Australia, the beneficial Owner of funds held by the Defendant Pacific International Trust Company Ltd (PITCO) in Vanuatu in the following accounts:
"Dr Kazacos Michael C, Trustee for Beau Jacob Kazacos Accounts;"
"Society Nominee Account;"
Dr. Kazacos’ Affidavit was sworn on 3rd February 1998 and filed on 16 February 1998.
In his Affidavit, Michael C. Kazacos deposes, inter alia, that in order to pay the debt he owed to the Australian Taxation Office, it was necessary for him to borrow funds in Australia, as funds invested with the Defendant were not available due to the restraining Orders issued by this Honourable Court and the interests rates payable on the funds are higher in Australia. He then wishes to avail himself of the invested funds held by the Defendant to repay the loans in Australia.
He deposes further that he requested that orders be made by this Honourable Court that he be joined as a party to the proceedings and that the three Orders made on the 19 February 1997 be discharged on the basis that the funds the subject of the Orders were not profits obtained from the Commission of serious offences.
(2) Affidavit of Beverly Yvonne Payton of New South Wales, Australia. She deposes, inter alia, that she is the Owner of funds held by the Defendant, PITCO Ltd in Vanuatu in an account entitled:
"Payton Beverly Nominee Account".
Her Affidavit was dated 4 February, 1998 and filed on 16 March 1998.
(3) Affidavit of Graig William Smiley of Queensland, Australia, a Barrister in the Supreme Court of Queensland currently in the employ of the National Crime Authority in Queensland (Australia). He deposes to the effect that in the Course of the National Crime Authority’s investigations, it was established that funds had been forwarded to Vanuatu by Michael Constantine Kazacos and they were held in various stylised accounts namely:
"Payton Beverly Nominee Account",
"Kazacos Michael C., Trustee for Beau Jacob Kazacos Account"; and
"Society Nominee Account".
He deposes further that Michael Constantine Kazacos’ indebtedness to the Australian Taxation Office has now been discharged to the full satisfaction of the Australian Tax Office.
(4) Affidavit of Tanya Maree Atwill, Solicitor in the employ of Messrs Price & Roobottom Solicitors and have the carriage on this action on behalf of Michael Constantine Kazacos and Beverly Yvonne Payton in relation to cases Nos. 8, 12 and 13 of 1997.
She deposes that, on Monday 9 February 1998 she received notice from the Attorney General’s Chambers (Vanuatu) that there is no need for her clients to apply to have the Orders discharged and advising that the Attorney General’s Chambers undertook to make the application to the Supreme Court to have the monies released.
She deposes to the effect that in anticipation of the monies being released on 11th February, 1998 she caused to be forwarded, a facsimile to the Defendant PITCO, requesting that the funds be transferred to certain accounts upon their release and also requesting detailed statements from the Defendant in relation to all interests and charges applied to each account.
She says further that on 20 February, 1998 they received a copy of a facsimile forwarded by the Attorney General’s Chambers via Susan Bothmann Barlow & Associates, advising that the Orders restraining monies held in the various accounts had been lifted.
She also deposes that on the same date of 20 February, 1998 they received a facsimile from the Defendant PITCO advising that as soon as the Orders were lifted, transfer of funds would be arranged as requested.
She deposes further that on 6 March, 1998 she received a facsimile from the Defendant advising that it intended to retain the total sum of approximately $220,000.00 for past and future costs and disbursements including $65,000.00 for legal fees out of their clients’ accounts.
On 9 March, 1998 she caused to be forwarded a facsimile to the Defendant indicating their clients’ objection to their proposal to retain the sum of approximately $20,000.00 on account of costs and disbursements. On the same date (9/3/98) she received a facsimile from the Defendant in relation to the fees and charges it intended to charge.
On 13 March, 1998 after being informed about the further two Orders releasing her clients’ monies, she caused to be forwarded a facsimile to the Defendant requesting a statement detailing all interests and charges applied to the funds.
She finally deposes she has not received a detailed statements in relation to these accounts from the Defendant despite her requests and that her clients have not received any statements from the Defendant since December of 1996.
Submissions on behalf of the Defendant PITCO by Mr Blake and Affidavit in support thereof
Mr Blake strongly opposes Dr Michael C. Kazacos to be joined as a party "CO-Plaintiff" in proceedings Civil Cases Nos. 8, 12 and 13 of 1997. He says these proceedings are carried out by the Attorney General pursuant to The Serious Offences [Confiscation of Proceeds Act] No. 50 of 1989. On the basis of the Attorney General’s application, this Honourable Court issued Orders freezing accounts the subject of these proceedings.
On 13 March, 1998 the Attorney General applied to have the freezing Orders lifted. He then submitted that that is when Proceedings in Civil Case No. 8 of 1997 end.
He then referred this Court to Order 17 rule 1 of the Western pacific High Court [Civil Procedure] Rules of 1964.
He pointed out that if one looks at Civil Case No. 8 of 1997, the funds were held because of some suspected offences in relation to these funds but 8 months later, upon being satisfied that they are not the proceeds of crime, the frozen Orders were then lifted.
He further said that the issue then was one of law: the right to freeze the accounts.
In this Summons, the intended Co-Plaintiff sought Orders about the monies which are no longer frozen and the Co-Plaintiff is now free to deal with his accounts. He said accounts are operated by the Defendant on the basis of contractual agreement with the intended Co-Plaintiff.
He then submitted that Order 17 rule 1 of the Court Rules cannot apply to join Dr. Kazacos as Co-Plaintiff in the proceedings.
He also referred the Court to the terms of Nominee Account:- Society Nominee Account operated by the Defendant on behalf of the Co-Plaintiff pursuant to the terms of a "Nominee Account Opening Form" which was annexed to the Affidavit of Thomas Montgomery Bayer, the Executive Chairman of the Defendant. The relevant term reads as follows:
"Your charges for services performed under this agreement are to be in accordance with your published schedule of Fees in effect from time to time and they are accepted by the principal, who shall be responsible for all expenses, taxes and other charges or liabilities insured by you in connection with this account and you are hereby authorised to charge this account therefore. If indebtedness is not satisfied thereby you, at your discretion, may at any time without tender, demand or notice to the principal reduce or close any or all of the accounts of the principal and by public or private sales or both, sell all or any securities and property held by you and thereafter any balance still due to you shall be paid by the principal without delay."
Mr Blake submitted, the said agreement between the Defendant PITCO and Dr Kazacos is about the charges and liabilities in connection with the account. The issue, here, he said, is of contractual nature. Nothing to do with the freezing of the accounts. It is an issue between the Defendant PITCO and Dr Kazacos.
He argued that the rules of the Court must be followed and should not be ignored. Therefore, the funds remained where they are. They will not be misappropriated. He said that when Mr Ozols will file appropriate proceedings, then they will be in a position to reply. He submitted then that the application to join Dr Kazacos as Co-Plaintiff be rejected. If the application is upheld, then the issue to be resolved should be done in different proceedings.
Mr Blake further says that there are issues between Dr Kazacos and the Defendant PITCO concerning the money charged in respect of:
- the fees of Lawyers in Australia, charged to the Defendant
- the fees likely to be charged by the Defendant relating to the operation of Accounts of Dr Kazacos.
He said he is not in a position to address the Court on that point since there is not enough evidence about the proceedings which were occurred in Australia.
He also put to the Court that they do not have any objection to transfer monies back to Australia but he insisted, that they have a contract with the intended Co-Plaintiff. However, if monies are ordered to be paid to Australia, the Defendant’s fees and charges to be recovered will be severally reduced and he, therefore, submitted that if the Court upholds Mr Ozols’ application, it constitutes a denial of the Defendant’s rights and it is too premature to do so.
Mr Thomas Montgomery Bayer, the Executive Chairman of the Defendant filed a Sworn Affidavit in support thereof.
He deposes, in effect, that the issues arising in Civil Case No. 8 of 1997 are entirely separate from the issues raised in the Summons. These proceedings concern the freezing of funds in a nominee account operated by the Defendant pursuant to an application of the Attorney General under the Serious Offences [Confiscation of Proceeds Act] of 1989.
He deposes that the issue arising under the Summons concerns the Defendant’s right to reimburse itself in respect of costs and expenses incurred in connection with the operation of the account out of the funds standing to the credit of that account. Dr Kazacos should be required to issue separate proceedings should he wish to contest the Defendant’s right.
He further deposes that they are concerned that if the Court grants Mr Ozols’ application the Defendant will lose any chance of recovering its costs and expenses which he says they are properly entitled to recover. He also deposes that if the funds in question are removed from the jurisdiction and out of the Defendant’s control they will be unable to recover what is a significant amount of money since Dr Kazacos has indicated by this application that he does not intend to pay they costs and this confirms they fear as to payment. He finally deposes that the Summons should be refused in its entirety.
Submissions on behalf of the Plaintiff/the Attorney General by Mr Kalsakau
Mr Kalsakau says that this Honourable Court issued Orders to de-freeze funds held. The issues now are between the Defendant PITCO and Dr Kazacos. The Attorney General is no longer concerned.
As to the Orders issued by the Court concerning the confidentiality of the information about these accounts not to be released, he submitted that while these Orders remained, it is likely that if the Court grants the Orders sought in the Summons, they will fly in the face of these Orders of confidentiality.
He emphasised that Orders of confidentiality concern information as from the date of Orders issued until the date of release and the current confidential Orders protect information through the Defendant. These confidential Orders constitute an impediment between the Defendant PITCO and Dr Kazacos.
He then submitted that the information be only released by the Defendant on the basis of fresh proceedings to be instituted between the Defendant PITCO and Dr Kazacos.
The Law: Relevant Provisions of the Rules of Court in Re. Western Pacific High Court (Civil Procedure) Rules of 1964
The Summons which is the subject of this hearing is issued under Order 53 rule 13 and Order 17 rule 1 of the Western Pacific High Court (Civil Procedure) Rules 1964.
Order 17 rule 1 provides generally for joinder of parties as plaintiffs in one action against a defendant or group of defendants-
Order 17 rule 1 says:
"All persons may be joined in one action as plaintiffs, in whom any right to relief in respect of or arising out of the same transaction or series of transactions is alleged to exist, whether jointly, severally, or in the alternative, where if such persons brought separate actions any common question of law or fact would arise; provided that, if upon the application of any defendant it shall appear that such joinder may embarrass or delay the trial of the action, the Court may order separate trials, or make such other order as may be expedient, and judgment may be given for such relief as he or they may be entitled to relief, for such relief as he or they may be entitled to, without any amendment. But the defendant, though unsuccessful, shall be entitled to his costs occasioned by so joining any person who shall not be found entitled to relief unless the Court in disposing of the costs shall otherwise direct."
It has to be noted that Order 17 rule 1 permits the joinder in the one action of all persons who have a common complaint against a defendant or group of defendants. It provides that all persons may join in the same action as plaintiffs where they have a right arising out of the same transaction or series of transactions, and where, if separate trials were held, a common question of law or fact would arise, or, if the Court gives leave. So if the Court is of opinion that the joinder will prejudice or delay the trial of the action, separate trials are ordered. Bendir v. Anson [1936] 3 All E.R. 326 provides an example of the persuasive authorities in the exercise of the discretion to order separate trials as does Richardson v. Trautwein [1942] HCA 5; [1942] 65 C.L.R. 585. The rule permits the joinder of parties, it does not prevent a joinder where the joint plaintiffs each have a separate cause of action against the Defendant.
In my view, a joinder of plaintiffs under O.17 r.1 is allowed [apart from the situation where the Court grants leave]:
1. Where the right to relief arises out of the same transaction or series of transactions, and
2. Where there is some common question of law or facts between the Plaintiff and the intended Co-Plaintiff if the intended Co-plaintiff brings separate actions.
These requirements are satisfied where the Plaintiffs have separate and different causes of action against the Defendant. Both conditions must be fulfilled for a joinder of Plaintiffs, if they are not the rule is not applicable and there can be no joinder except with the leave of the Court. A possible example of persuasive authorities of where the Court would give leave is seen in the High Court (Australia) decision in Payne v. Young (1980) 145 C.L.R. 609.
As a matter of interpretation, Order 17 rule 1 has to be construed liberally. The expression "any right to relief in respect of or arising out of the same transaction or series of transactions..." is wide enough to encompass all matters of relevance to, or which have a connection with, the transaction which is the subject of a dispute. The situation must be viewed as a whole, and if, when viewed as such, there is a common question among the Plaintiffs arising out of that transaction, then they must all join in the same action as plaintiffs. For a joinder to be justified, the plaintiffs must show some causal act or breach on the part of the defendant which damaged the plaintiffs. When that can be shown, the plaintiffs may all join in the same action as joint plaintiffs.
Another consideration under O.17 r.1 [which is of no application in this case], is where the application is made by a defendant to join other person(s) in the proceedings, the Court may order separate trials if it shall appear that such joinder may embarrass or delay the trial of the action.
A further consideration ought to be made also when application for a joinder is made under Order 17 rule 1 which has to be read and applied in conjunction with Order 17 rules 11 & 12.
Order 17 rules 11 & 12 provide for addition, [deletion and substitution] of parties.
Order 17 rule 11 says [to the extent of its relevancy]:
"... The Court may, at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the names of any parties... whether as plaintiffs... or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter, be added...".
And Order 17 rule 12 continues:
"Any application to add... a plaintiff... may be made to the Court at any time before trial... or at the trial of the action...".
In this case, the Summons/application to join the intended Co-plaintiff as a party in proceedings Civil Cases Nos. 8, 12 & 13 of 1997, was not issued by the Plaintiff/Attorney General nor the Defendant PITCO. The Summons was issued by the intended Co-plaintiff himself through his Counsel, Mr Juris Ozols.
The rules have comprehensive provisions for the addition... of parties. Where a person who is not a party ought to have been joined or whose presence is necessary for a complete adjudication of the dispute, the Court may make an order for a joinder.
Essentially the rationale is for the trial Court to fully and finally determine the matter in dispute. It is to be understood that, the Court, on an application to join a plaintiff, does not pre-empt the role of the trial Court by closely examining the proposed Co-plaintiff’s title to sue. The decision whether the intended plaintiff has a cause of action is the prerogative of the trial Court. It is to enable the trial Court to consider this question that is the correct function of the present rule. Importantly, the function of this Court under Order 17 rules 11 & 12 is to be satisfied that the joinder application (by Summons) is proper, then the onus imposed by this rule is discharged.
Application of Law/Rules to the factual situations in this case
Upon considering carefully the Affidavits of both parties, and the circumstances related to this application and the proceedings in Civil Cases Nos. 8, 12 and 13 of 1997, I now apply the Law/Rules to this case.
Application of Order 17 rule 1
The intended Co-Plaintiff must fulfil two requirements under Order 17 rule 1 in order to be joined as a party in Civil Cases 8, 12 & 13 of 1997.
(1) His right to relief (or his claim) arises out of the same transaction or series of transactions with that of the Plaintiff/Attorney General in the proceedings against the Defendant.
In Civil Cases Nos. 8, 12, &13 of 1997, the Attorney General/Plaintiff applied to freeze the accounts because of some suspected offences in relation to these funds as pursuant to The Serious Offences [Confiscation of Proceeds Act] of 1989. These Orders were then respectively lifted on 24th February 1998 and 13 March 1998.
The transaction or series of the transactions in these proceedings are investigations made by Australian Authorities and frozen orders issued by this Court on the intended Co-Plaintiff’s funds operated by the Defendant. The Co-Plaintiff does not establish any breach on the part of the Defendant which damaged the intended Co-plaintiff causing investigations and frozen orders of 19 February 1997, so that he could be joined as Co-plaintiff in these proceedings with the Plaintiff/Attorney General.
Quite the contrary, it transpires from the submissions/ arguments that the Plaintiff/Attorney General is not concerned at all with the relief the Co-Plaintiff sought in parts 2, 3 & 4 of the Summons against the Defendant. Further and more importantly, nothing in the Affidavit in support of the Summons shows that the Plaintiff/ Attorney General and the intended Co-plaintiff, Dr Kazacos have a common complaint again the Defendant PITCO.
The Co-Plaintiff fails to fulfil the first requirement of Order 17 Rule 1.
(2) The Co-Plaintiff must establish that there is some common question of law or facts if separate trials were ordered.
In Civil Cases Nos. 8, 12 & 13 of 1997, the Plaintiff/Attorney General applied and got Orders to have the Co-Plaintiffs’ accounts frozen. The question of law then was the right of the Plaintiff/Attorney General to have the accounts frozen as per the Serious Offence [Confiscation of Proceeds Act] of 1989. The claim of the intended Co-Plaintiff is, inter alia, his right to have his funds which is not objected to since the frozen orders were lifted. Any claims the intended Co-Plaintiff may subsequently have against the Defendant PITCO as to charges of fees, costs on operations of the accounts etc. ... are subject to agreement between the intended Co-plaintiff and the Defendant PITCO. There is no common question of law in proceedings Civil Cases Nos. 8, 12 & 13 of 1997 and the relief sought in the Summons between the Plaintiff/Attorney General and the intended Co-Plaintiff. The Affidavits in support of the Co-Plaintiff’s application do not establish either that the claim arises out of a common question of facts in these proceedings. The question of costs in Civil Cases Nos. 8, 12 & 13 of 1997 is a matter between the Plaintiff and the Defendant in these proceedings. The Co-Plaintiff fails also to satisfy the second requirement under Order 17 Rule 1.
Application of Order 17 Rules 11 & 12
Review of persuasive authorities
Application of this procedure in some Commonwealth Jurisdictions seems to have varied between a broad and a narrow approach. The broad approach is exemplified in the decision in Gurtner v. Circuit [1968] 2 Q.B. 587. There the Court of Appeal in England allowed the Motor Insurers’ Bureau to be joined as a defendant on its own application. The Plaintiff was injured in a Motor vehicle accident. After searches it was impossible to trace the offending driver, whom the plaintiff had sued for damages. An order for substituted service was made. Had the defendant not appeared to defend the action, the Plaintiff would have been entitled to enter a judgment by default for the assessment of damages. The Bureau would incur a liability to pay the plaintiff the amount of the assessed damages. To prevent that situation from arising the Bureau applied to be made a defendant so that it could apply to have the order for substituted service set aside and to appear at any assessment of damages. Lord Denning M.R. allowed the joinder on the basis that a judgment for the plaintiff would affect the Bureau. It would become liable on the judgment. His Lordship was of the opinion that a party could be added where the determination of proceeding would directly affect either the legal rights or the finances of the person sought to be added. This is a broad interpretation of the joinder rule. A more precise formulation was put forward by Diplock L.J. He held that the Bureau did not qualify to be joined on the ground that it was a person who ought to be joined within the meaning of the rules. The action was completely and validly constituted without the Bureau being a party. While the Bureau had a commercial interest in the outcome of the dispute, it did not have a legal interest. The test for a joinder formulated by Diplock L.J. as comprehended under the rules, was that the only reason that makes it necessary to join a party is so that that person becomes bound by the judgment. Accordingly, the question to be settled is whether the action cannot be effectively and completely resolved unless that person is made a party. In the case of Gurtner v. Circuit [1968] 2 Q.B. 587, the position of the Bureau is a special one. Diplock L.J. allowed the joinder on the basis that the rules of natural justice would allow the Bureau to defend the action as it would be liable on the judgment.
A narrow approach to joinder is illustrated by the decision of Devlin J. in Amon v. Raphael Tuck & Sons Ltd [1956] 1 Q.B. 357. There the plaintiff sued for damages for the breach of an agreement to keep confidential certain information about an invention for which the plaintiff was responsible. He also sought an injunction to restrain the defendant from using the information. An application was made by the defendant to join a Co-defendant. It was alleged that the proposed Co-defendant was responsible for the invention and that he had authorised the defendant to produce it. Ultimately the Court allowed the joinder, but only on the ground that a narrow test was satisfied. The question to be settled was one which cannot be effectively and completely settled unless that person becomes a party. It is insufficient for a joinder that the person has a commercial or indirect interest in the resolution of the dispute, rather it must be a direct and legal interest. In that case, the joinder was allowed because the grant of an injunction against the defendant would affect royalty entitlements under an agreement between the defendant and the intended Co-defendant.
The narrow approach was endorsed by the House of Lords in Vandervell Trustees Ltd v. White [1971] A.C. 912. A dispute about the ownership of trust funds affected liability for tax. An application by the Island Revenue Commissioners to be joined as defendants was rejected. Ownership of the funds in question could be determined without the Commissioners being parties to the action. A need for further proceedings to decided the tax issue did not justify a joinder. Viscount Dilhorne rejected the broad approach as formulated by Lord Denning M.R. in Gurtner v. Circuit because it appeared to be unrelated to the wording of the rule. He thought that the rule could not be construed to mean that a party could be added whenever it was just and convenient. On the contrary, the powers of joinder is limited to where the person ought to be joined as a party or if the presence of another party is necessary for the complete and effectual determination and adjudication of all matters in dispute [see Vandervell’s case at pp. 935-936].
Another, and probably more useful, version of the test for the addition of a party was put forward by the Privy Council in Penang Mining Co. Ltd v. Choong Sam [1969] 2 Malayan L.J. 52. Lord Diplock said that a person could be added as a party where that person’s rights or liabilities against any party in respect of the subject matter of the proceedings would be directly affected by an order that could be made in the proceeding.
I share and adopt the view that if the test for addition or substitution of a party is expressed this way, the requirements of both the broad and narrow versions can be accommodated in most cases and the test applied by Lord Diplock in Penang Mining Co. Ltd v. Choong Sam is to be preferred.
A further explanation was put forward by the New South Wales Court of Appeal in Qantas Airways Ltd v. A.F. Little Pty Ltd [1981] 2 N.S.W.L.R. 34. Where a plaintiff applied for leave to add a defendant, the rules should be applied so that a joinder is allowed to include matters which are subjacent to the pleadings. The rules should not be construed as limited to allowing a joinder as to matters arising out of the existing pleadings. There the plaintiff sued an architect and an engineer because of the defective design of a building. The Court allowed the plaintiff to add the builder to allege alternative claims in tort and contract. The case of Qantas Airways Ltd v. A.F. Little Pty Ltd shows that different considerations apply where a party is being added to the plaintiff’s application than apply where a defendant applies to add a Co-defendant over the plaintiff’s opposition. The New South Wales Court of Appeal in that case, distinguished Amon v. Raphael Tuck & Sons Ltd on this basis. Where the plaintiff applies to add a defendant the phrase in the rules " all matters in dispute in the proceedings" should not be limited to matters arising on the existing pleadings. It seems that the plaintiff may add a defendant where the allegations to be made are merely relevant to the issues between the original parties. Where a defendant applies to add a Co-defendant over the plaintiff’s opposition, the Co-defendant’s presence must be necessary for the complete adjudication of the issues between the existing parties.
A liberal application of the joinder rule has been favoured in some Australian authorities. [see in Re Great Eastern Cleaning Services Pty Ltd [1978] 2 N.S.W.L.R. 278 & in Re Multi-Tech Services Pty Ltd (in Liq.) [1984] 30 S.A.S.R. 218.
Having reviewed some of the Commonwealth persuasive authorities on the application of the procedure to add or substitute a party in the action, I am persuaded that the test to be followed and applied in this case is the test put forward by the Privy Council in Penang Mining Co. Ltd v. Choong (referred to above).
Order 17 Rule 12 clearly says that any application to add... a plaintiff may be made to the Court at any time before trial... or at the trial of the action.
The Orders to freeze the intended Co-Plaintiff’s accounts were made on 19 February 1997. No application was made by the Co-Plaintiff to be joined. These Orders were respectively lifted on 24 February 1998 and 13 March 1998. On 24 February 1998, no application was made by the Co-Plaintiff to be joined as a party in these proceedings. The Co-Plaintiff made his application on 13th March 1998 when the remaining Orders to lift the frozen Orders were then granted which constitutes the end of proceedings in Civil Cases Nos. 8, 12 & 13 of 1997. In this case, I am of opinion that the Co-Plaintiff cannot either succeed under Order 17 Rule 12 since the Summons was issued after these proceedings were already completed under The Serious Offences [Confiscation of Proceeds Act] of 1989.
As to the application of Order 17 Rule 11, I incline to grant leave to the Co-Plaintiff to add his name as Co-Plaintiff since I am of the view that the application is improperly constituted. It is not the Court’s function at this stage, to settle issues that could arise subsequently between the Defendant PITCO and the intended Co-plaintiff. The joinder of the intended Co-plaintiff in proceedings Re Civil Case Nos. 8, 12 & 13 of 1997 is considered to be not necessary within the meaning of the rules. The action was already completed under the Serious Offence [Confiscation of Proceeds Act] of 1989.
Finally, I may say that if the Co-Plaintiff wishes to lodge a subsequent claim for his accounts against the Defendant/PITCO he should proceed with fresh proceedings.
I therefore make the following Orders:-
1. The Orders sought in the Summons are rejected in its entirety;
2. If the Co-Plaintiff wishes to proceed with subsequent claim as to his account against the Defendant, new proceedings should be instituted to that effect.
3. Costs of this application be paid by the Co-Plaintiff and be taxed failing agreement.
DATED AT PORT-VILA, THIS 17th DAY OF MARCH, 1998
BY THE COURT
VINCENT LUNABEK, J.
Acting Chief Justice
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