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Kera v Mbaeroko Timber Company Ltd [2002] SBHC 108; HC-CC 015 of 1998 (28 March 2002)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 15 of 1998

RODERICK TERRY KERA

V.

MBAEROKO TIMBER COMPANY LIMITED,
GOLDEN FOUNTAIN, (S. I.) CO.
NELSON HUTI AND ATTORNEY-GENERAL

HIGH COURT OF SOLOMON ISLANDS
(F.O. Kabui, J.)

Date of Hearing: 21^st March 2002
Date of Ruling: 28^th March 2002

Mr C. Ashley for the 1^st Defendant.
Mr F. Waleanisia for the 4^th Defendant.

RULING

(Kabui, J): The Solicitor for the 1^st Defendant filed a draft judgment order on 20^th December 2001 for me to sign and perfect. I did not do so because I was not sure that the 4^th Defendant had been served with the order I signed on the 26^th November 2001. It was known that the Solicitor for the 4^th Defendant, Mr. Waleanisia, was not in Court on the 26^th November 2001 when I made the order to be served on him. If he had not been served, the order cannot be held against him for failing to file his defence within 21 days. I therefore directed the Registrar to request the Solicitor for the 1^st Defendant to file an affidavit in support of the draft judgment order. That affidavit was filed on 20^th December 2001 in the afternoon by the Solicitor for the 1^st Defendant. The content of that affidavit was brief and lacking in terms of complying with Order 9, rule14 of the High Court (Civil Procedure Rules) “the High Court Rules”. There must be personal service on the party to be served or else on the relevant advocate or the recognized agent of that party. Exhibit “CKA’’ attached to the affidavit was just a covering letter dated 26^th November 2001 signed by the Solicitor for the 1^st Defendant and addressed to the Attorney –General of the Attorney-General’s Chambers. The affidavit does not say who effected service and upon whom and at what time service was effected (see Court of Appeal decision in Leslie Allison v. Monique Medlin, Civil Appeal No, 7 of 1996). Being in doubt about the correctness of service, I further directed the Registrar to request the Solicitor for the 1^st Defendant to file a Summons seeking the same orders sought in his draft order and serve it on the 4^th Defendant. That Summons was filed on 31^st January 2002. I assumed that this Summons had been served on the 4^th Defendant, although there is no affidavit of service in the Court File. The hearing date was 21^st March 2002 at 9:30am. Both Counsel were present in Court and made submissions.

Extension of time

The 4^th Defendant decided to file and did file a Summons on 22^nd February 2002 seeking the following orders-

1. That leave be granted to extend time to allow the 4^th Defendant to file his defence;
   
2. That the 1^st Defendant’s application for an order for judgment be dismissed.
   

The Background

The Plaintiff in the first place was Roderick Terry Kera. He filed an Amended Writ of Summons together with an Amended Statement of Claim on 20^th July 2001 claming relief of various kinds against all the Defendants including the 1^st and 4^th Defendants. The 1^st Defendant filed its defence on 21^st August 2001 in which the 1^st Defendant claimed against the 4^th Defendant the sum of $637,226.82 as export duty on logs exported from Dorah Island. This sum was the export duty paid as a result of revocation of duty remission previously granted by the Government to the 1^st Defendant. In the meantime, Roderick Terry Kera as the original Plaintiff dropped out of the scene as a result of a consent order executed by the parties on 21^st August 2001 by which the Plaintiff agreed to discontinue his action against all the Defendants. The Plaintiff filed a Notice of Discontinuance on 23^rd August 2001 confirming his agreement to do so. In the meantime, orders for directions were made on 21^st September 2001 requiring the 4^th Defendant to file defence within 21 days and the 1^st Defendant to file a reply within 14 days thereafter. By Summons filed on 18^th October 2001, the 1^st Defendant sought orders to the effect that the 1^st Defendant was entitled to judgment for damages valued at $637,226.82 plus interest of $107,648.88 for the period 31^st July 2001 to 31^st September 2001 together with interest at 5% of $744,875.70 from 1^st October 2001 until payment and costs to be taxed if not agreed. I heard this Summons on 26^th November 2001 at 11:00 am in the morning of that date and made an order against the 4^th Defendant in the absence of Counsel acting for the 4^th Defendant.

The 1^st Defendant’s Case

The case for the 1^st Defendant was that it was entitled to judgment because the 4^th Defendant had failed to file defence within the 21 days specified in the orders for directions on 21^st September 2000 resulting in “the unless order“ I made on 26^th November 2001. The 4^th Defendant had also failed to apply for extension of time within 21 days specified in the said unless order. Counsel for the 1^st Defendant, Mr. Ashley, argued that the 4^th Defendant had no good excuse for having failed to file defence within time or to apply for extension of time. The second point he made was that the 4^th Defendant produced no evidence to suggest that the 4^th Defendant had a prima facie defence to the action against it. He further argued that the 1^st Defendant’s claim was a liquidated sum that required no further assessment.

The 4^th Defendant’s Case

The 4^th Defendant’s case was that the delay in filing defence could be explained. The affidavit sworn and filed by Mr. Waleanisia on 22^nd February 2002 explains that awaiting instructions from the Ministry of Finance took a very long time. In fact, it took about 5 months before someone from the Customs and Excise Division gave instructions. The letter seeking instructions was dated 24^th September 2001 with a reminder dated 15^th November 2001. Instructions came only in February 2002. No defence could have been filed in November 2001. The absence of Mr. Waleanisia from Court on 26^th November 2001 was due to family reasons, which were explained to the Court. Mr. Waleanisia only saw the order of 26^th November 2001 and other documents on or about 12^th February 2002 whereupon he proceeded to apply for an extension of time and thereby prepared a defence. Apart from that, Mr. Waleanisia, argued that the 4^th Defendant did have a prima facie defence in this case. He said the defence being points of law, which were important in the public interest. That is to say, whether the Minister of Finance in granting the alleged duty remissions and allegedly revoking them would have any legal consequences in the light of the ruling in Golden Start Trading Corporation Limited v. Attorney-General (on behalf of the Minister of Finance) (Civil Case No.193 of 1997).

Court’s Determination

As usual the starting point is Order 64, rule 5 of the High Court (Civil Procedure Rules) “the High Court Rules” which gives the Court the power to extend time where justice requires that power to be exercised by the Court. The power of the Court is discretionary in nature. Although the Court does have this discretion to grant extension of time it cannot do so in a vacuum. There must be evidence before the Court upon which the Court makes a decision in one-way or the other. The evidence in this case is the affidavit filed by Mr. Waleanisia on 22^nd February 2002. Clearly, the delay by the instructing Ministry was the cause of the delay in filing the defence. The other factor in the delay was the fact that Mr. Waleanisia had not seen the Court order of 26^th November 2001 until 12^th February 2002 in February 2002 the same month instructions were given to him the Solicitor for the 4^th Defendant. This fact would clearly suggest that even if the Solicitor for the 4^th Defendant had been properly served with the Court order of 26^th November 2001, no defence would have been filed until after 12^th February 2002. The 4^th Defendant’s defence was filed on 22^nd February 2002, which meant a delay of 10 to11 days. In the case of Lawrence Lae and Willie Karejama v. Valahoana Company Integrated Development and Others Civil Case No.269 of 1999, the delay to file the defence was 7 months by the time it was filed in Court. I accepted the defence filed. I applied the same approach in the case of Nelson Koroi v. Transwest Company Limited, Civil Case No. 007 of 2001. The period of delay in that case was about 3months or so. I did the same in the case of Peter Tahani v. Attorney-General Civil Case No. 245 of 2001. The delay was also about 3 months. (Also see Solomon Islands Home Finance Limited v. Sophia Chotu, Civil Case No. 91 of 2001). The other factor that affects the discretion of the Court is if there is evidence of a prima facie defence on the part of the Defendant. In this case, the defence raises a point of law. That is an issue that calls for consideration by the Court (see Ross Mining (S. I.) Limited & Gold Ridge Mining Limited v. Willie Roni & David Thuguvoda, Civil Case No. 294 of 1997), Westpac Banking Corporation v. R. D. & Sons Commercial Development Ltd and Others, Civil Case No. 157 of 1999 and Development Bank of Solomon Islands (DBSI) V. Daisy Betu & Brownless Zaku Civil Case No. 203 of 2000). The defence also denies some facts alleged by the 1^st Defendant in its claim against the 4^th Defendant. In my view, the 1^st Defendant should be allowed to defend this action. In fact, defence had already been filed. I would allow extension of time for the 4^th Defendant to file its defence. The application by the 1^st Defendant is refused. Costs will be costs in the cause.

F.O. Kabui
Judge