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Chow v Attorney General [2000] SBHC 31; HC-CC 127 of 2000 (8 August 2000)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 127 of 2000

MARY CHOW

v

ATTORNEY GENERAL

High Court of Solomon Islands
(F. O. KABUI), J)

Hearing: 4th August 2000
Ruling: 8th August 2000

A. Nori for the Plaintiff
F. Waleanisia for the Defendant

RULING

(Kabui, J): The Plaintiff filed a Writ of Summons against the Defendant on 28^th April 2000 together with her Statement of Claim. She claims damages for breach of contract and damages for negligence. The Defendant filed an appearance on 5^th May, 2000. By Notice of Motion filed on 23^rd May, 2000, the Defendant is now asking the Court to strike out the Plaintiff’s Statement of Claim on the basis that it discloses no cause of action in contract or negligence. This is being done under Order 27, rule 4 of the High Court (Civil Procedure) Rules 1964 (the High Court Rules). The Orders asked for by the Defendant in the Notice of Motion are in these terms –

(a) The Court to strike out the Writ of Summons and the Statement of Claim hereof on the ground that they do not disclose a reasonable cause of action, either in contract or negligence or any other ground.

(b) Plaintiff to meet the costs of the Defendant in respect of this application.

(c) Such further or other orders as the Court thinks fit.

The Practice in the Courts

An action may be terminated for defective pleadings on two grounds. The first is when the pleading discloses no cause of action. The second is when no defence is disclosed. This can arise in two ways. First is as above stated. That is to say, there being no cause of action or defence disclosed in the pleadings. Second is where the pleading is so badly drafted that the facts are not sufficiently stated. In cases where the pleadings are so badly drafted, amendments can cure the drafting defects. Not so where the allegation is that there is no cause of action or no defence as each allegation hinges on the law.

The purpose of this summary procedure under the High Court Rules adopted from the English Supreme Court Rules 1883 is to ensure that cases in which the Statement of Claims are without legal basis do not reach the trial stage. That is to say, the procedure is a cost saving mechanism in the rules of practice like other summary procedures under the same rules. The practical application of it however is not automatic in that it is automatically applied by the Courts in all cases. The power to do so is discretionary depending upon the circumstances of each case. This is because there is that risk of killing off the action prematurely and perhaps unjustly before the case is heard in Court at the trial stage where all the evidence in the Plaintiff’s case will be led to reveal the full strength of the Plaintiff’s case. This procedure is therefore reserved only for cases where there can be no doubt by any stretch of imagination that the Plaintiff clearly has no case to argue in Court. This procedure is described in the words of LINDLEY M.R. in Hubbuck & Sons v Wilkinson, Heywood & Clark [1898] UKLawRpKQB 176; [1899] 1 Q.B. 86 at 91 thus –

Order XXV. abolished demurrers and substituted a more summary process for getting rid of pleadings which show no reasonable cause of action or defence. Two courses are open to a defendant who wishes to raise the question whether, assuming a statement of claim to be proved, it entitles the plaintiff to relief. One method is to raise the question of law as directed by Order XXV., r. 2; the other is to apply to strike out the statement of claim under Order XXV., r. 4. The first method is appropriate to cases requiring argument and careful consideration. The second and more summary procedure is only appropriate to cases which are plain and obvious, so that any master or judge can say at once that the statement of claim as it stands is insufficient, even if proved, to entitle the plaintiff to what he asks. The use of the expression “reasonable cause of action” in rule 4 shows that the summary procedure there introduced is only intended to be had recourse to in plain and obvious cases. The authorities collected in the Annual Practice show that the Courts have always so construed rule 4, although sometimes, no doubt, a statement of claim may be so long and the facts so complicated that considerable time and attention are required to ascertain their true result, as in Republic of Peru v. Peruvian Guano Co. (1).

The principles of practice set out by LINDLEY M.R. above have since remained the basis of present approach by the Courts which apply the same practice rules as the High Court of Solomon Islands. I need not cite all the cases on this point in this jurisdiction as this procedure has been frequently applied in this jurisdiction.

The Facts in this Case

The evidence before me consists of the Writ of Summons, the Statement of Claim, the affidavit of the Plaintiff filed on 18^th July, 2000 and a number of letters attached thereto as Exhibits. These Exhibits are “MC1”, “MC2”, “MC3”, “MC4”, “MC5”, “MC6”, “MC7”, “MC8”, “MC9”, “MC10”, and “MC11”. The Plaintiff is a Chinese woman. She runs a food business known as Amy’s Snack Bar located in the Centre of Honiara. On 4^th January, 1999, Mr. Virivolomo wrote a letter to her (“MC1”) informing her that her property would be affected by the Honiara Main Road Upgrading Project (the Project) being carried out through the Ministry of Transport, Works and Aviation. Mr. Nori, the Plaintiff’s Solicitor, responded by letter dated 16^th July, 1999 (“MC2”) and told Mr. Wale, the Secretary to the Ministry of Transport, Works and Aviation of the need for a proper agreement with the Plaintiffs before the road work could be extended on to the Plaintiffs property. On 4^th August, 1999, the Commissioner of Lands, Mr. Nesa, again told the Plaintiff by letter (“MC3”) that her property was to be affected by the Project and that any damages caused would be compensated by the Government. That is compensation would be paid. Mr. Nori, again responded by letter dated 8^th August, 1999 (“MC4”). In that letter, Mr. Nori set out the Plaintiff’s compensation package or proposal and asked the Government to respond within 14 days. The details were that the Plaintiff’s claim was in the sum of $9,392,350.00. Once this was accepted within 14 days, the Government and the Plaintiff must enter into a Sale/Purchase Agreement. This Agreement must provide for –

1. the down payment of 50% of the compensation money upon the signing of the Agreement;
   
2. the other 50% must be paid within the following 6 months plus 15% interest per annum;
   
3. any balance remaining unpaid for a further 6 months will attract 20% interest per annum;
   
4. full settlement of the deal must be done within 12 months;
   
5. no road work should commence until an Agreement is signed.
   

The Attorney-General by letter dated 15^th September, 1999 (“MC5”) pointed out to Mr. Nori that the locations of the fence and the huts in the frontage of the Plaintiff’s property were on public land but nevertheless these had to be removed to allow road work to commence. Mr. Nori again responded by letter dated 20^th September, 1999 (“MC6”) in which he said the Plaintiff was prepared to reduce the Plaintiff’s claim for the removal of the fence, huts and tiles to the sum of $3,000. The Attorney-General by letter dated 21^st September, 1999 (“MC7”) demanded the Plaintiff to remove the fence, huts and tiles within 7 days by 27^th September, 1999. The Attorney-General again by letter dated 30^th September, 1999 (“MC8”) explained to Mr. Nori that the fence would be removed and be relocated temporally along the correct boundary line of the Plaintiff’s property to allow road work to commence. Upon near completion of the road work and the readiness to commence work on the footpath, Government’s position would be clearer as to assessing the Plaintiff’s compensation. The Commissioner of Land, Mr. Nesa, then advised the Plaintiff by letter dated 20^th December, 1999 (“MC9”) that sufficient part of her property was needed for the footpath and needed to be acquired for that purpose. He also advised the Plaintiff to scale down her operation and to shut down completely by the end of January, 2000. He also said that the Plaintiff’s property would be surveyed and valued in due course. The Commissioner of Lands, Mr. Nesa, then advised the Plaintiff in a letter dated 1^st February, 2000 (“MC11”) that the road design had changed and so there was no longer the need to take away the Plaintiff’s property and that she could continue her business operation as before as though nothing had happened.

Do the facts disclose a cause of action in contract?

I think, the starting point is the provision in section 5 of the Roads Act (Cap. 129). This section states -

“The Director with the approval of the Minister first had and obtained may order that any new road be opened or any road be widened and enlarged and if in the execution of any order under this section it shall become necessary to take possession for public purposes of the land of any person the Director, subject to the like approval, may make an agreement on behalf of the Government with the owner for the compensation to be made for such land and for any building, tree or fence thereon, and if the Director cannot agree with such owner as to the compensation to be made or if the owner cannot be found, proceedings may be taken for obtaining possession of such land and for compensating the owner in the manner prescribed in Part V of the Land and Titles Act.

Clearly, there is specific provision for the making of a contract between the Government and the owner of the land being required for road construction and for the payment of compensation for the use of the land in question. Even the provisions for the compulsory acquisition of land under Division 2 of the Land and Titles Act (Cap. 133) do provide for the need for an agreement for the payment of compensation to the owner of land to be compulsorily acquired. It is plain that there are two stages of reaching an agreement for payment of compensation under the Roads Act. The first stage is reaching an agreement without the need for a compulsory acquisition procedure under Division 2 of the Land and Titles Act. The parties are the Director being the Permanent Secretary of the Ministry of Works and Aviation or any other officer appointed by the Minister and the owner of the land in question. The second stage is reached only if the first stage has failed to produce an agreement. As is always the case in contracts, negotiation always precedes the contract signing.

In this case, I must assume on the evidence before me that the parties were implementing the first stage of the acquisition process for the taking of the Plaintiff's property. As already stated, the Plaintiff was first informed of the Government's intention to take away her property by letter dated 4^th January, 1999 ("MC1") forwarded to her by Mr. Virivolomo on behalf of the Government. This letter made no promise of anything to the Plaintiff. Mr. Nori's response dated 16^th July, 1999 ("MC2") was simply a warning to the Government that road works should not be extended on to his client's property until an agreement was first put in place to allow entry on to his client's property. The letter dated 4^th August, 1999 ("MC3") was the first indication to the Plaintiff that part of her property was to be taken away by the Government for the construction of a round-about road way. In this letter, the Commissioner of Lands, Mr. Nesa, told the Plaintiff that any damages caused to the Plaintiff's property would be compensated by the Government after the property had been valued. This letter ("MC3") was not an offer by the Government to pay compensation. It was an explanation by the Government of its intention and the result of it to the Plaintiff when part of the Plaintiff's property is finally taken away at a future date. The response by Mr. Nori in his letter of 8^th August, 1999 ("MC4") was the Plaintiff's compensation package/proposal should the Plaintiff's property be taken away as intended by the Government. The Plaintiff's compensation package/proposal was in the form of an offer to the Government. In that package/proposal $9,392,350.00 was the compensation money. The Government was asked to accept it within 14 days in writing. Upon acceptance, a sale/purchase agreement must be entered into by the Government and the Plaintiff which sale/purchase agreement must provide for the terms specified in that letter referred to above.

This letter ("MC4") was copied to the Director and the officer of the Project. This letter was never acknowledged by the Government. There is no evidence to suggest that it was so acknowledged. In the meantime, the Attorney-General in a letter dated 15^th September, 1999 ("MC5") informed Mr. Nori of certain facts which if accepted by Mr. Nori were important in the assessment of compensation. In response, Mr. Nori in a letter dated 20^th September, 1999 ("MC6") reduced the claim for the removal of the fence, huts and tiles to $3,000 a reduction of $22,000 from the Plaintiff's claim of $25,000. Mr. Nori however maintained that the Plaintiff's property would never be the same again after the road works were completed. By letter dated 21^st September, 1999, the Attorney-General demanded that the Plaintiff remove the fence, huts and tiles within 7 days by 27^th September, 1999. By letter dated 30^th September, 1999, ("MC8") the Attorney-General explained to Mr. Nori the Government's position regarding the Plaintiff's claim. In that letter, the Attorney-General said that the fence would be relocated temporarily along the correct boundary of the Plaintiff's property to allow road work to commence and once that was about to complete and the work on the footpath was ready to start, the position would be much clearer in terms of the assessment of compensation. In this letter, the Attorney-General was reiterating the fact that the Plaintiff's fence and huts were on Government land as already referred in the Attorney-General's earlier letter of 15^th September, 1999 ("MC5") above, and only the footpath might take away part of the Plaintiff's property. By letter dated 20^th December, 1999, ("MC9") the Commissioner of Lands, Mr. Nesa, told the Plaintiff to scale down her operation and to shut down completely by the end of January, 2000. The Commissioner of Lands in that letter said that sufficient part of the Plaintiff's property was being acquired for the construction of a footpath, pointing out also that survey as well as valuation were to be done on the Plaintiff's property. The Plaintiff then made her own arrangement to move out of her property. This arrangement was in the form of a Sale/Purchase Agreement ("MC10") signed on 10^th February, 2000 between the Plaintiff and one Ruby Lee for the sale of the Plaintiff's kitchen items, furniture and stock etc. By letter dated 1^st February, 2000 ("MC11"), the Commissioner of Lands, Mr. Nesa informed the Plaintiff that the road design had changed resulting in the need for acquiring the Plaintiff's property being abandoned. In that letter, the Commissioner of Lands, Mr. Nesa, advised the Plaintiff to continue with her snack Bar business as before and thanked her for her understanding and co-operation. In this analysis, the facts are repeated purposely to show clearly whether or not an agreement of the sort intended by section 5 of the Roads Act had been concluded and signed by the Plaintiff and the Government and the Plaintiff now seeks to enforce it.

Was there an agreement to pay compensation in place at this stage? I do not think so. I say this because in my view, Mr. Nori's letter of 8^th August, 1999 ("MC4") above containing the terms of the Plaintiff's offer was never accepted by any of the Government Officials engaged in communicating with the Plaintiff and her Solicitor in this matter. There is no evidence of an acceptance of the Plaintiff's offer or a counter-offer by the Government and an acceptance by the Plaintiff. What had transpired between the parties in this case was nothing more than an inconclusive negotiation process commenced in January, 1999 and abandoned in February, 2000. No agreement for compensation had been concluded and signed by the parties in this case. There is therefore no breach of contract on the basis that no contract exists in the first place.

Do the same facts disclose a cause of action in negligence?

In my view, a cause of action in negligence exists in this case. It is open for the Plaintiff to question the manner in which the Government officials carried out the negotiation process with her through her solicitor culminating in telling her to scale down her business operation and to shut down completely, by the end of January, 2000. Relying upon the advice of the Government officials, she took steps to close down her business operation only to be told later by the same Government officials that she should forget about the matter and continue her business as normal as before. The reason given was that the road resign had changed thus removing the need for a round about road way. That is clearly back-pedalling on the Government’s earlier position.

Conclusion

Applying the principles applicable to "striking out" of actions as in this case, I find that there is no cause of action in contract in this case. That is to say that although there was intention on both sides to conclude an agreement for the payment of compensation to the Plaintiff for the taking of her property, that intended agreement was never reached. There is nothing in this case capable of being enforced as a contract. However, I do find that the facts do disclose a cause of action in negligence in that the Plaintiff had changed the course of her business acting upon the advice tendered by the Government through the Commissioner of Lands, Mr. Nesa and suffered loss of her business. I would allow the cause of action in negligence to proceed to trial.

The manner in which the statement of claim was drafted is such that the cause of action in contract and the cause of action in negligence are intended to arise from the same facts. As such it is rather difficult to strike out the specific paragraphs in the Statement of Claim suggesting the existence of a contract without also destroying the relevance of those paragraphs to the cause of action in negligence. I have therefore decided to make an order to be general in nature but which effect is that the cause of action on contract be struck out and does not proceed to trial leaving only the cause of action in negligence to proceed to trial. In the result, the Defendant has partly succeeded in his application in that I find in his favour in agreeing with him that there is no cause of action in contract in this case and against him in finding that there is a cause of action in negligence which must proceed to trial. I therefore in accordance with that finding (I) order that the cause of action in contract be struck out as constituting no cause of action and (2) make no order as to costs.

I Order accordingly.

F.O. Kabui
Judge