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Yee Bing Store Ltd v Yuen [2001] SBHC 66; HC-CC 012 of 1997 (14 September 2001)

HIGH COURT OF SOLOMON ISLANDS
Civil Case No: 12 of 1997

YEE BING STORE LIMITED

-v-

YVETTE MIU POND YUEN
AS EXECUTRIX OF THE WILL OF
HENRY TA TONG YEE DECEASED

High Court of Solomon Islands
FRANK O KABUI, J
Civil Case No: 12 of 1997

Hearing: 4 September 2001
Judgment: 14 September 2001

Mr A. Radclyffe for the Plaintiff
Mr J. Sullivan for the Defendant

JUDGMENT

(Kabui, J): This is an unusual application in that it came before me without any Court papers. An exchange of correspondence between the Solicitors for the parties and the Registrar is all that there is in the Court. File. I had a feeling at the hearing that something was amiss. I was quite in the dark as to what was to come at me from the bar table. I had the impression that Counsel for both parties were not quite certain as to the correctness of their decision in making this application and its prospect of success. I may well be wrong in my impression. However, the fact is that Yee Bing Store Limited (the Plaintiff) -v-Yuen (the Defendant) (Civil Case No. 12 of 1997) came before me for directions at 9:30 am on 4th September 2001. Mr Radclyffe of Counsel appeared for the Plaintiff and Mr Sullivan of Counsel appeared for the Defendant who was also the Plaintiff on a counter-claim. Mr Sullivan made an oral application without a Motion or Summons. I brought to the attention of Mr Sullivan the fact that no Summons had been filed by any party to initiate the application for hearing. Mr Sullivan then sought leave to proceed and undertook to file a Summons by Friday 7th September 2001. I granted leave and Mr Sullivan proceeded with his oral application followed by a reply from Mr Radclyffe. In pursuance of that undertaking, Mr Sullivan filed an ex post facto application by leave on Monday 10th September 2001 seeking the following orders:-

1. For the purposes of the judgment of the Court given on 15th September 1999, the defendants by counterclaim within thirty (30) days file and serve a notice making an election as to which of the defendants by counterclaim are to pay to the plaintiff by counterclaim an amount equal to the value of the shares in the first defendant by counterclaim, being thirty percent (30%) of the value of the first defendant by counterclaim, and judgment shall be entered against that defendant by counterclaim accordingly.

2. in default of the defendants by counterclaim making an election in accordance with paragraph 1, the plaintiff by counterclaim may within thirty (30) days thereafter file and serve a notice making an election as to which of the defendants by counterclaim re to pay to the plaintiff by counterclaim the said amount, and judgment shall be entered against that defendant by counterclaim accordingly.

3. For the purposes of the judgment of the Court given on 15th September 1999, the value of the first defendant by counterclaim as at 6 October 1994 shall be the net assets of the first defendant by counterclaim as declared in the accounts of the first defendant by counterclaim tendered at trial, being the accounts for the year ended either 30 September 1994 or 30 September 1995, whichever of those accounts reflected the directors' revaluation of the lands owned by the first defendant, including the land that the plaintiff by counterclaim is required to transfer to the first defendant by counterclaim under the said judgment.

4. For the purposes of the judgment of the Court given on 15 September 1999, in the event that any party wishes to rely on the value of the first defendant by counterclaim, that party shall, within 60 days, file and serve all experts reports upon which the party intends to rely in fixing the value of the said shares as at 15 September 1999.

5. In the event that no party files any reports in accordance with paragraph 4, the parties shall be taken to have elected to proceed on the basis that the said shares are to be valued in accordance with paragraph 3 and the plaintiff by counterclaim

shall have leave to enter judgment for the relevant amount against the relevant defendant by counterclaim as ascertained in accordance with paragraphs 1 and 2.

6. In the event that any party files a report or reports in accordance with paragraph 4, and there are no reports filed by any other party disputing the value shown in such report or reports, then the value of the shares as at 15 September 1999 shall be ascertained in accordance with such reports and the plaintiff by counterclaim shall have leave to enter judgment for the value o£ the shares as at either 6 October 1994 or 15 September 1999, whichever is the higher (as determined in accordance with this Order), against the relevant defendant by counterclaim as ascertained in accordance with paragraphs 1 and 2.

7. In the event that such reports are filed by more than one party, the plaintiff by counterclaim shall have liberty to apply on seven (7) days written notice for a determination of the value of the shares as at 15 September 1999.

8. The parties have general liberty to apply for further orders or directions on seven (7) days written notice.

9. There be no order as to costs in relation to this application.

10. Such further or other orders as to this Honourable Court may seem meet.

These orders are along the lines suggested by Mr Sullivan in his oral application on Friday. No affidavit material had been filed in support of this application. Nor had I been guided by any submission by Counsel on the law regarding my power to correct or supplement the orders of another judge. I have simply been asked to sort out the machinery for the implementation of the order made by Awich J. on 15th September 1999. I can only try my best in this situation.

Awich, J. delivered a 44 pages judgment on 15th September 1999 after full trial. The formal order was also signed by His Lordship on that same date. The Order is in these terms -

1. There was a contract between Yee Bing Store and Henry Yee in which one of the terms required Henry Yee to transfer back land parcel No. 191-019-178 to Yee Bing Store Limited when the building loan obtained by Henry Yee from SINPF would have been paid off by Yee Bing Store Limited. Payment has been completed partly by Yee Bing Store Limited and partly by insurance claim on a policy that Yee Bing Store Limited paid premium for, payment of the loan is deemed accomplished by Yee Bing Store Limited, Henry Yee was liable on his obligation to transfer land parcel No. 191-019-178 back to Yee Bing Store Limited. He did not transfer the land, his estate is liable.

2. Money compensation is not adequate compensation, the Court grants order of specific performance, requiring Yvette Miu Fong Yuen, the executrix of the estate of Henry Yee, to proceed to:

2.1 have the charge of SINPF loan to parcel 191-019-178 removed from the register of fixed term estate, as the loan has now been fully paid and Henry Yee's estate has been freed from the obligation to pay the loan, the Registrar of Title to act accordingly.

2.2 have parcel No. 191-019-178 transferred back to Yee Bing Store Ltd; the undated transfer, "RT Form 4," signed by Henry Yee is to be dated by the executrix or her representative, failing that, by the Registrar of the High Court, the transfer form to be regarded as good instrument for transfer, and the Registrar of Titles is to effect the transfer accordingly.

3. Transfers of shares of Mr Yee Bing to Gin Yee and of Gin Yee to Yee Wong Lai King were not presented to the company to afford it opportunity to refuse or agree to register the transfers as required under article 6 of the Company's Article of Association, the transfers were invalid, but if that failure could be rectified by proper resolution of the company, the Court would regard the transfers as prejudicial and oppressive acts, aimed at unduly giving control of the company to Gin Yee and diluting the shares of Henry Yee, and not effected in furtherance of the interest of he company.

4. the allotment of 5,000 shares to Gin Yee is invalid because it was not effected by resolution of directors, and if that could be rectified by proper resolution of the company, the Court would regard it as an oppressive and prejudicial act intended to benefit Mr Gin Yee by giving him overwhelming control and diluting the shares of Henry Yee, and was not done to serve the interest of the company.

5. The counter - claim succeeds, the Court orders that the company, Yee Bing Store Limited, buy the shares of Henry Yee at a fair price reflecting 30% worth of the company immediately before the first oppressive and prejudicial act of transferring shares, recorded as having occurred on 6.10.1994, or at a fair price reflecting the shares' present investment value of 30% worth of the company, goodwill included, whichever price is the higher.

6. The plaintiff has succeeded on its claim and the defendant on the counter - claim. Parties are to bear own costs.

A quick look through the High Court (Civil Procedure) Rules 1964 (the High Court Rules) reveals Order 43, which deals with entry of judgment. I do not think Order 43 applies because Awich, J's order was perfected as long ago as 15th September 1999. The general rule is that a Court has no jurisdiction to vary its own order after the order has been passed and entered. (See Liliau v Trading Company (Solomons) Limited (No. 2) [1983] SILR 40). The next thing that comes to my mind is "the slip rule" but I cannot find it anywhere in the High Court Rules. Further research reveals Order 20, rule ll of the Supreme Court Rules 1965 _ published in The Supreme Court Practice 1973, Volume 1 at page 342. Rule 11 states-..."Clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may . at any time be corrected by the Court on motion or summons without an appeal"....

This rule is reproduced and remains unaltered at page 384 of The Supreme Court Practice 1995, volume l. In terms of Order 71 of High Court Rules, "the slip rule" as it exists in Order 20, rule 11 of the Supreme Court Rules 1965 in England is the rule that applies in Solomon Islands. However, "the slip rule" has its own limitation. It applies only to clerical errors arising from accidental slip or omission committed in such judgments or orders (See Milson v Carter [1893] UKLawRpAC 44; [1893] AC 638). In my view, "the slip rule" does not really help in this case because there is no evidence to say that clerical or accidental errors or omissions had been committed in the judgment delivered by Awich, J. or His Lordship's Order for that matter. Apart from "the slip rule", the Court does have an inherent jurisdiction to vary its own orders so as to carry out its own meaning and to make its own meaning clear. However, the power to vary its own orders does not extend to a call to alter its judgment or order in its substance. The appropriate remedy is an appeal. (See Pearlman (Veneers) S.A. (Pty) Ltd v. Bartels [1954] 3 A E R 659). In other words, the rehearing of its own order in its substance is not within the jurisdiction of the Court (See Preston Banking Company & Sons v. William Allsup [1895] 1 Ch. D. 141). There is however jurisdiction to make a supplemental order if necessary. The existence of this jurisdiction of the Court was recognized as long ago by Lord Halsbury and Lord Lindley in Preston Banking Company & Sons v. Allsups cited above. The position was restated in In re Scowby[1897] UKLawRpCh 33; , [1897] 1 Ch. 741. In that case, Kekewich J. made on 17th December 1896 certain orders to the effect that no further costs were to be paid out of the deceased's estate until certain conditions were satisfied. Kekewich, J. found that the previous trustees of the deceased's estate had not paid into Court costs as ordered by Kay, J. on 22nd July 1887 complied with. Two previous orders had also been made on 4th February 1892 and 23rd December 1892 by Kekewich, J. by which the judge ordered taxation and payment of costs to the previous trustees. The orders were not complied with nor was Kay, J's order made on 22nd July 1887. In dealing with the appeal from Kekewich, J's order dated 17th December 1896, Lindley L.J. at pages 750 - 751 of His Lordship's judgment said, ..."Now, pausing there for a moment, let us consider whether the learned judge had any jurisdiction to make such an order. I cannot suppose for a moment that there was no power to make it. The state of things is this. It is brought to the attention of the judge that trustees have disobeyed the order of the Court - that is, the order of 1887. He says, "Very well: those trustees were directed to bring certain money into court. They have since obtained certain orders for payment out to them of moneys for costs. I will stop that until they have performed their duty." I cannot conceive that there is the slightest difficulty in upholding the jurisdiction".... A.L. Smith, L.J., in support, at pages 754 - 755 said ..."Now, first of all, had the learned judge jurisdiction to make this order of December 17, 1896? He did not touch the previous orders of February 4 and December 23, 1892, nor had he any jurisdiction to do so. What he did was to make a supplemental order, to the effect that the two orders of February 4 and December 23, 1892, are not to be further acted upon until the trustees who are in default have put themselves out of default by bringing the money into court as they were ordered to do in 1887, and which they have never done up to the present moment. That he had jurisdiction appears to me to be clear from the judgment of the Lord Chancellor in Preston Banking Co. v. William Allsup & Son... to which I was a party, and which is to the effect that there is jurisdiction to make a supplemental order upon new facts, although there is no jurisdiction to alter an order when once it has been drawn up and entered. That being so, I think my brother Kekewich no doubt had jurisdiction to make the order now appealed against".... Rigby L.J. did not disagree. The principle enunciated in In re Scowby cited above was applied by Eve, J. in Hall v Burnell [1911-1913] A E R 631 and by Brightman J. in Ford-Hunt & Another v. Raghbir Singh [1973] 1 W.L.R. 738. In the former case, consequent upon an order for specific performance, the defendant having failed to fulfill his obligation, the Plaintiff was able to obtain a supplemental order for the rescission of the contract and return of his deposit. In the latter case, consequent upon the making of an order for specific performance, the seller of the property failed to execute the transfer thus necessitating further proceedings by the purchasers for vacant possession. By Notice of Motion, the purchasers sought a supplemental order for an inquiry to find out whether the purchasers had incurred damages as a result of the seller's delay in performing his obligation under the contract between them. There are numerous examples of these sorts of cases where the Courts in exercising their discretion upon the facts before them were able to decide the issues in those cases. The value of citing some of these cases is simply to affirm that the Court does have jurisdiction to make a supplemental order where on the facts of the case, such an order can be made to attain justice in a particular case.

This Case

As I have said, no affidavit evidence was filed in Court by both parties in this application. Everything that was said by each Counsel about this application was from the bar table. Mr Sullivan for his part pointed out that there were two issues to be sorted out by the Court, namely, who should buy the shares from the deceased's estate and how such shares should be valued. Mr Radclyffe for his part did not disagree with what Mr Sullivan said in this regard. However, neither Mr Sullivan nor Mr Radclyffe told me why paragraph 5 of Awich , J's Order was troublesome apart from telling me that it was troublesome. I was left to guess. The point that caught my attention was Mr Sullivan's remark that the first issue to be sorted out was who was to buy the shares from the deceased's estate. As to that issue, the position is clear. Awich, J. ordered that Yee Bing Store Limited was to buy the shares. The problem may be that in company law, Yee Bing Store Limited is owned by its shareholders. How could it buy its own shares from its shareholders? Can it be a shareholder of itself? Is this what I am being asked to decide in this application? If it is, then I must think again. I have just said in this judgment that a Court cannot rehear its order if the order being sought is not an order to correct clerical mistakes in judgments orders or mistakes or errors arising from accidental slips or omissions in such judgments or orders (see Preston Banking Company & Sons v William Allsup cited above). A mistake due a misunderstanding of a rule or a statute cannot be corrected under "the slip rule". (See Charles Bright & Co. Limited v Sellar [1904] 1.K.B.6 at 12 and Re Gist [1904] UKLawRpCh 9; [1904] 1 Ch. 398 at 408). Unfortunately, the second issue pointed out by Mr Sullivan also ties up with the first issue. That is to say, Yee Bing Store Limited is to buy shares from the deceased's estate the value of which will reflect 30% worth of the Company immediately prior to the transfer of shares on 6th October 1994 or at a fair price reflecting the shares' present investment value of 30% worth of the Company and its goodwill whichever price is higher. I do not think a supplemental order is appropriate in this case. There are no new facts in this application to cause me to consider and make a supplemental order. If there are new facts, what are they? There are none. (see In re Scowly cited above). In my view, there should have been an appeal against Awich J.'s Order dated 15th September 1999. The orders sought in this application by Summons are in fact asking me to alter the substance of paragraph 5 of Awich J's Order. I do not think I can do that because that paragraph is very clear in its intention. There is no room for any one to elect anyone to pay to the Plaintiff in the counter - claim the value of the shares held by the deceased's estate. Yee Bing Store Limited is to buy those shares and no one else. However, Yee Bing Store Limited cannot buy them until they have been valued. If, Yee Bing Store Limited as a separate legal entity is in law incapable of buying its own shares in the first place, what then is the use of jumping ahead and valuing the shares to be sold? I do not think I can split the two issues raised by Mr Sullivan and sever the second issue from the first issue and isolate it for the purpose of making a supplemental order. To do so would not make sense because even if it is done, the standing of Yee Bing Store Limited as the purchaser of the shares now valued would still legally be in doubt. The value of any supplemental order in that regard would be self- defeating in the sense that it would not really improve or complete Awich J's order as regards the first issue which is a legal one. The purpose of a supplemental order is really to enhance the intention of the. judgment or order being sought to be supplemented rather than altering its substance. To supplement is to add to something in order to improve or complete it. That is not the case here. There is nothing to add to paragraph 5 of Awich, J's order in order to improve or complete it to obtain justice without an appeal. If indeed, the true legal position is that Yee Bing Store Limited cannot buy its own shares, then the position ought to be corrected by an appeal. There is no other way. A supplemental order is note the answer to this application. This application is therefore dismissed. I make no order as to costs.

F.O. KABUI
JUDGE