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Reef Pacific Trading Ltd v Kama [1999] SBHC 6; HC-CC 056 of 1996 (5 February 1999)

HIGH COURT SOLOMON ISLANDS

Civil Case No. 56 of 1996

p class="Mss="MsoNormal" align="center" style="text-align: center; margin-top: 1; margin-bottom: 1"> RECIFIC TRADING LIMITED AND OTHERS

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p clas class="MsoNormal" align="center" style="text-align: center; margin-top: 1; margin-bottom: 1"> THT. KAMA

In the High Court of Solomon Islands

Before: FRANK KABUI, J

Civil Case No. 56 of 1996

Hearing: 21 January 1999

Judgement: 5^th February 1999

Plaintiffs in Person

Defendant in Person

JUDGEMENT

(Frank Kabui J): The Plaintiffs by a Writ of Summons filed on 16^th February, 1996 together with a Statement of Claim, claim costs amounting to $168,988.69 plus damages by reason of the Defendant�s wrongful misconduct, breach of duty, negligence, distress, anxiety, hardship and embarrassment. The claim for costs is itemised in schedules 1 - 4 attached to the Statement of Claim. These costs are said to arise from the orders of the Court of Appeal in its Judgement delivered on 4^th November, 1994 (Civil Appeal No. 1 of 1994). The Writ and the Statement of Claim were delivered to the High Court Registry on 20^th February, 1996 at 9 am by Mr. Wolfgang Meiners by placing them in the Defendant�s pidgeon hole. The Defendant entered a conditional appearance to the Plaintiffs� Writ on 29^th February, 1996. An attempt by the 2nd Plaintiff to enter a final judgement against the Defendant in default of appearance was refused by Awich, J on 1^st March, 1996 on the ground that it did not comply with Order 9 of the High Court (Civil Procedure) Rules, 1964. Another attempt by the 2^nd Plaintiff to obtain a final judgement against the Defendant in default of defence was also refused by Awich, J on 15^th April, 1996. A judgement in default was therefore averted. By letter dated 29^th February, 1996, the Defendant�s Solicitor told the Plaintiffs in no uncertain terms that the Writ, the Statement of Claim, and the affidavit attached thereto, did not disclose any cause of action against the Defendant and that the Plaintiffs� action was an abuse of the Court process. Also, the Plaintiffs were asked to withdraw their action by 4pm on Monday 4^th March, 1996 or else their Writ and the Statement of Claim be struck out by due process of law. The Plaintiffs having done nothing of the sort requested of them by the Defendant�s Solicitor, the Defendant took action. The Defendant then filed a summons dated 10^th April, 1996 seeking the following orders:-

1. &nsp; &&nbp;;&nbpp; That the Writ of of Summons filed on 16^th February and the Statement of claim filed therewith be struck out on the following grounds:-

a) &nbbsp; the issu of of the Writ and the Statement of Claim is an abuse of process;

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b) the iss ance of he Wthe Writ by the Plaintiff is in breach of Section 14(1) of the Legal Practitionct (n of 1

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d) & tae cl s are fare frivolous and vexations and instituted for an improper purpose.

class="MsoNormaNormal" style="text-indent: -36.0pt; line-height: 14.4pt; margin-left: 72.0pt; margin-top: 1; margin-bottom: 1"> 2. &nbbsp;& &bsp;&bsp;&nbp; ther,ornd or, in t in the alternative that this Honourable Court order that the action be stayed permanently.

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3. &nbs; &nbbp;&nnbp;&&nbp;; The e Plaintiffs pay the costs of and incidental to the application on solicitor own client basis.

clasoNormtyle=-height: 13.8pt; margin-left:left: 18.0 18.0pt; mpt; marginargin-top: 1; margin-bottom: 1"> This summons was heard by Awich, J on 15^th April, 1996. In the course of writing up judgement, Awich, J decided to recluse himself and ordered that this case be heard by another judge. That order was made on 3^rd February, 1998. This case was again set down for hearing and it came before me for that purpose at 9:30 on Thursday 21^st January, 1998.

The Facts

p clas class="MsoNormal" style="margin-top: 1; margin-bottom: 1"> The 1^st Plaintiff is a Company incorporated in Solomon Islands. The 2^nd, 3^rd and 4^th Plaintiffs are directors and shareholders of the 1^st Plaintiff. The Defendant is a barrister and solicitor practising law in the High Court of Solomon Islands. The Defendant had been the 1^st Plaintiff's lawyer in Island Enterprises Limited v Reef Pacific Trading Limited (CC119/90) and Peter Alexander Mathew v Reef Pacific Trading Limited (CC65/91). The Defendant subsequently became the lawyer for Reef Pacific (Sydney) Pty Ltd. in Civil Case No. 246/91 against the 1^st Plaintiff. In Civil Case No. 209/93, the 1^st Plaintiff sued the Defendant in the High Court for damages alleging misconduct, failure to return files and notes and breach of confidentiality of information. The 1^st Plaintiff did not succeed. Palmer, J. ruled that the proceeding against the Defendant was an abuse of the court process and therefore the proceeding against the Defendant be stayed permanently. This ruling by Palmer J. still stands. Costs were also awarded against the 1^st Plaintiff.

The Statement of Claim/p>

clas class="MsoNormal" style="line-height: 14.4pt; margin-top: 1; margin-bottom: 1"> I feel it is important that the Plaintiffs� Statement of Claim be set out in full. It contains facts which may or may not disclose any cause of action. The Statement of Claim is as follows:-

1. &nnbsp;;&nbssp;&bsp;&nbs;&nbs; Reef Paci TradiTrading Limited is a company incorporated pursuant to the laws of the Solomon Islands, cap, capable able of suing in its own name.

2p; &bsp; Wogfgan Meiners, Joa, Joann Meiners and Davinia (Mesepitu) Philip are directors of the of the Plaintiff company, Reef Pacific Trading Limited.

las class="MsoNormal" style="text-indent: -36.0pt; line-height: 14.4pt; margin-left: 72.0pt; margin-top: 1; margin-bottom: 1"> 3. &nbssp;&nnbsp;&nsp;&nsp;&nbp; Mr. s. T. T. Kama iama is a barrister and solicitor admitted to practice in the Solomon Islands having his place of business at 6^th

4. &nbs; &nbbp;&nnbp;&&nbp;; On the the 20^th August 1991 the Plaintiffs engaged Thomas Kama and paid him fees to act as their legal represene. Duthe fing 3hs up until 11^th up> N Novembovember 1991, the directors of the Plaintiff company had numerous professional communications with Mr. Kama and provided him with notes and other documents relating to the company�s affairs including discussions regarding the alleged agreement with Reef Pacific and the difficulties caused to the Plaintiff company by the appointment and conduct of the receivers.

clas class="MsoNormal" style="text-indent: -36.0pt; line-height: 14.4pt; margin-left: 72.0pt; margin-top: 1; margin-bottom: 1"> 5. p; &bsp; On the 1> November 1991 Thomas Kama filed in the High Court, a writ of summons and statement of claim in action CC246 of 1991 against the Plaintiff company and its directors.

6. &nbs; &nbbp;&nnbp;&&nbp;; After fter filing the writ and statement of claim Thomas Kama notified the Plaintiffs that he had ceased to act for them and had filed action against them.

7. & &nbsp &nbp; ttele received 12^th November 1991, Thomas Kama mismed tgistrat the Plafs haaged anot another Bher Barrisarrister ater and sond solicitlicitor to act for them, full well knowing that it was untrue.

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8. &nsp; Th Plaintiffs engagengaged the professional services of Gregory Clive Parr, solicitor, of Lee Turnbull & Associates after receiving the writ and ementlaim nstructed Parr to make a companympany sear search onch on Mr. Kam�s client at the Australian Company�s Security Office.

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9. &nbp; &nnbp;&&nbp;;&nbpp; The Stae Statement of Claim attached to the writ issued by Mr. Kama in action CC246 of 1991 claimed on amount of AUD$503,311.14 and concerned allegations of fact which, Kama had previously been informed by the Plaintiffs, were false.

clas class="MsoNormal" style="text-indent: -36.0pt; line-height: 14.4pt; margin-left: 72.0pt; margin-top: 1; margin-bottom: 1"> 10. &nnbsp; Osp; On 29th November 1991, Gregory Clive Parr swore an affidavit filed 2^nd December 1991 in a CC241991,delivto Mr. Kama that sa same day. Attached to the affidavit wast was an A an Austraustralian Company�s Security search record. This document showed that Mr. Kama�s client company did not exist, at the material time, it also showed that neither Rosa nor Graeme Price were directors of the alleged company.

as class="MsoNormal" style="text-indent: -36.0pt; line-height: 14.4pt; margin-left: 72.0pt; margin-top: 1; margin-bottom: 1"> 11 & p; &nbp;&nbp; On the 5^th

PARTICULARS

(a) &bsp; ; &nbbp;&nAt the the time me Thomas Kama filed the writ of summons in action CC246 of 1991 he was the legal representative and solicitor on record for the Plaintiffs. Knowing this and in an attempt to justify his unethical behaviour Mr. Kama, by letter, that same day advised the High Court Registrar that he had ceased to act for the Plaintiffs and further misinformed the Registrar by stating that his clients (the Plaintiffs) had engaged another Barrister and Solicitor, knowing this was untrue. Mr. Kama did not inform the Plaintiffs of any of these events until after he had filed action CC246 of 1991 against the Plaintiffs.

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(b) &nbbsp;& Mr. Kama ama wo would have known on the 2^nd December 1991 after receiving the affidavitregorve Pad theched Australian Company's Security search that, fro, from them the docu document ment referred to as 000 981 803 it was clear that the Prices were not directors of Reef Pacific (Sydney) Pty Ltd at the material time as claimed and later submitted by Kama to Palmer J. It was also clear that his client Reef Pacific (Sydney) Pty. Ltd. could not have been party to any agreement executed on the 24^th January 1991 as claimed and later submitted by Kama throughout the many hearings of the matter. His client company simply did not exist.

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(c) ;&nbssp; bn the 5^{th December 1991 the Plaintiffs herein obtained an order for security of con thent of000 Sainst Mr. Kama�s client. On the 19th Dec Decemberember 1991 1991 Mr. Mr. Kama delivered to the Registrar a copy of a document purported to be a genuine bank guarantee drawn up by the National Australia Bank, Sydney and used as his clients� ordered payment into court as security. Mr. Kama obtained a judgement order against the Plaintiffs on 23rd April 1992 in the amount of $402,038.14 against the Plaintiffs he also obtained a separate judgement in default against the Plaintiff, Davinia (Mesepitu) Philip on the same day for the same amount. Full well knowing that the beneficiary to the $402,038.14 of both judgment orders did not exist at the material time and could not have been a party to receive any benefit from the claim.}

(d) ;&nspp; Os the 21^{st July 1993 Michael Harley Roberts, solicitor of Sydney swore an affidavit on behalf of Mr. Kama's client iled relattter.he hearing of an apan applicaplication tion beforbefore Pale Palmer J. on the 29th day of July 1993 to set aside the writ of fieri facias in action CC246, Mr. Kama tendered the affidavit sworn by Michael Harley Roberts on 21st July 1993. The affidavit was significant in that it supported the earlier affidavit filed 2nd December 1991, sworn by Gregory Clive Parr.}

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Both affidavits exhibited documents which proved Mr. Kama�s client dent did not exist, yet Mr. Kama continued with the action.

(e)  p; &nOsp; e the 19^{th October 1995 the Full Court of Appeal found in favour of the Plaintiffs herein, wherein at page I1 paras 2 and 3 of the judgement Williams JA states;}

�Further, Palmer J was in error in saying that the document being Notification of �Change of Officer Holders of Australian Company� was not before the Court�. The document number referred to is 000 981 803 and that document was exhibited to Parr�s affidavit. Perhaps the confusion arose because it had nothing, to do with the appointment of the Prices, as was the submission to Palmer J by Mr. Kama. Of course in December 1990 neither the Prices nor Roberts knew what company they would be acquiring.�

�It is clear on all the material that the Prices were not directors of Reef Pacific (Sydney) Pty. Limited on 24^th January 1991, and that company (by whatever name) could not have been party to an agreement executed on that date. The fact that on 24^th January 1991 its predecessor in name was in existence on a shelf in Sydney is irrelevant�.

(f) &nnbsp;; &nsp; Osp; On 28^th November 1994 the Plaintiffs herein filed and served on Mr. Kama a Defence to action CC246 o1 as ed byCourtppeal (p.13 para 3)ra 3) alon along with a request for Further and Bett Better Paer Particulars. Mr. Kama failed within a reasonable time to respond and as a result the Plaintiffs herein asked the Court for directions on 2^nd November 1995.

Mr. Kama atd the hearing still claiming to represent the �noe �non existent� company. The Registrar at that time ordered Mr. Kama to deliver further and better particulars within 30 days with costs awarded to the Plaintiffs herein. Mr. Kama has failed to respond to the order

AND THENTIFFS CLAIM COSTS of $168,988.69 pursuant to the orders of the Court of Appeal and further by reason of the Plaintiff�s continued wrongful prosecution of action CC246 of 1991. The costs claimed are scheduled 1 to 4 hereto.

AND THE PLAINTIFFS CLAIM DAMAGES by reason of the Defendants� wrongful conduct. The Plaintiffs have suffered loss and damage and they claim loss and damages in wrongful prosecution, breach of duty, negligence, distress, anxiety, hardship and embarrassment. Such loss and damage to be independently assessed.

Plus the costthis action.�

Cause of Action

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Tis no doubt that here the Defendant is being sued by his former client, the 1st Plaintiff. �There is however a difference. The difference is that the Defendant has never acted for the 2^nd, 3^rd, and 4^th Plaintiffs as individual clients per se. This is specifically denied by the Defendant in paragraph 3 of his Defence filed on 12^th April, 1996. I think this is correct in that the 1^st Plaintiff is a separate legal entity which can sue or sued in court. This means that everything done for it or on its behalf must be done in its name through human agents such as its directors and employees. In my view, the 2^nd, 3^rd and 4^th Plaintiffs should have never been parties to this action. They have no cause of action against the Defendant. As I have said, they have never been clients of the Defendant at any time. Also, it is important to note that the 1^st Plaintiff had been a client of the Defendant only in relation to Civil Case No. 119/90 and Civil Case No. 65/91 cited above. The Statement of Claim in this case is not about that previous client/lawyer relationship. The Statement of Claim is about the consequence of the Defendant acting for Reef Pacific (Sydney) Pty. Ltd. against the 1^st Plaintiff in Civil Case No. 246/91. There was no longer a client/lawyer relationship between the 1^st Plaintiff and the Defendant after the Defendant ceased to act for the 1^st Plaintiff. The fact that the Defendant acted against the 1^st Plaintiff in Civil Case No. 246/91 does not in any way create a client/lawyer relationship between the 1^st Plaintiff and the Defendant after the Defendant ceased to act for the 1^st Plaintiff. At that point in time, there was no longer any retainer contract, if any, or a duty of care owed towards the 1^st Plaintiff by the Defendant. Mr. McGuire, Counsel for the Defendant, argues that the Statement of Claim does not disclose any cause of action at least on the face of it. He says, in particular, there is no evidence of either a retainer relationship or client/lawyer relationship between the 1^st Plaintiff and the Defendant after the Defendant ceased to act for the 1^st Plaintiff. If there was any such relationship, it was between the Defendant and Reef Pacific (Sydney) Pty. Ltd. I think this is well understood by the directors and shareholders of the 1^st Plaintiff. I think their case is this though ill-conceived it may be. They regard the Defendant abandoning them and then going against them in Civil Case No. 246/91 as an act never to be easily forgiven for they have suffered a lot as a result of it. By crossing the floor, the Defendant is regarded by the 1^st Plaintiff and its directors and shareholders as a double-crosser being directly responsible for their difficulties. This is obvious from the facts set out in the Statement of Claim. That is to say, the Defendant is a traitor and an opportunist. Somehow, somewhere along the line, the Defendant must pay for what he did to them. I can easily understand such an attitude from the 1^st Plaintiff directors and shareholders as lay persons. However, be that as it may, they cannot drag the Defendant into court unless they can point to a cause of action that entitles them to be heard in Court. As I have said, the 2^nd, 3^rd and 4^th Plaintiffs in this action do not have a cause of action against the Defendant because no legal relationship has ever existed between them and the Defendant. The action brought by them as directors and shareholders of the 1^st Plaintiff is no more then being frivolous and vexatious to say the least. The same is true of the 1^st Plaintiff. It has no cause of action against the Defendant. It has not identified any cause of action in law or equity in its Statement of Claim. The action brought by it in this court is also frivolous and vexatious. In coming to this contusion, I am mindful of the Court�s discretionary power in this sort of cases in that the power to strike out any proceeding must always be sparingly exercised by the Court. That is to say, the power to strike out any proceeding must be exercised in favour of the party requesting it only in very clear cases. The position is set out thus at pages 575 - 576 of the Annual Practice 1961, Volume 1, �No Reasonable Cause of Action.�

�There is some difficulty in affixing a preciseecise meaning to this term. In point of law, ... every cause of action is a reasonable one� (per Chitty, J., Rep. Of Peru v. Peruvian Guano Co., 36 Ch. D. p. 495). But the practice is clear. So long as the Statement of Claim or the particulars (Davey v Bentineck[1892] UKLawRpKQB 216; , [1893] 1 Q. B. 185) disclose some cause of action, or raise some question fit to be decided by a Judge or a jury, the mere fact that the case is weak, and not likely to succeed, is no ground for striking it out (Moore v. Lawson, 31 T. L. R. 418, C. A.); nor is the fact that the Statute of Frauds (which is merely a provision as to evidence) might be a bar to the claim (Fraser v. Pape (1904), 91 L. T. 340, C. A.); or the Statute of Limitations (Murray v. Secretary for India, [1931] W. N. 91; Dismore v. Milton, [1938] 1 All E. R. 762, C. A)���So if in an action of contract it appears clearly that there is no contract between the plaintiff and the defendant (South Hetton Coal Co. v. Haswell, [1898] UKLawRpCh 39; [1898] 1 Ch. 465); or no contract valid in law (Humphreys v. Polak[1901] UKLawRpKQB 130; , [1901] 2 K. B. 385); or if the matter be already res judicata (Birch v. B., [1902] p. 130, C. A.; Conquer v. Boot, [1928] 2 K. B. 336; Green v. Weatherill [1929] 2 Ch. 213); or if the action be brought solely to obtain relief which the Court has no power to grant (Dreyfus v. Peruvian Guano Co.[1889] UKLawRpCh 36; , 41 Ch. D. 151; Wing v. Burn 44 T. L. R. 258); or if relief be asked on a ground which is no ground for such relief (Johnston v. J., 33 W. R. 239, C. A.), the Statement of Claim will be struck out, and the action dismissed...�

�Frivolous or Vexatious Actionsn>.pt">. By these words are meant cases which are obviously frivolous or vexatious, or obviously unsustainable (per Lindley, L. J., in A. C, Of Duchy of Lancaster v. L. & N. W. Ry., [1892] 3 Ch. P. 277; Day v. William Hill (Park Lane), Ltd., [1949] 1 K. B. 632; Law v. Dearnley, [1950] 1 All E. R. 124, C. A., and in Kellaway v. Bury, 66 L. T. P. 602; Bean v. Flower, 73 L. T. 371). For instance, it is vexatious and wrong to make solicitors, or others, parties to an action merely in order to obtain from them discovery or costs (Burstall v. Beyfus, 26 Ch. D. 35; and see Farnham v. Milward[1895] UKLawRpCh 152; , [1895] 2 Ch. 730). But a judicial discretion must be used in determining whether the proceedings are vexatious (per Halsbury, L.C., in Higgins v. Woodhall, 6 T. L. R. P. 1). The pleading must be "so clearly frivolous that to put it forward would be an abuse of the process of the Court� (per Jeune, P., in Young v. Holloway, [1895] P. P. 90; and see Whitworth v. Darbishire 68 L. T. 216)�...