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Samlimsan (SI) Ltd v Toronto Connection (SI) Ltd [2011] SBHC 167; HCSI-CC 442 of 2011 (12 December 2011)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Mwanesalua J)

Civil Case No. 442 of 2011

BETWEEN:

SAMLIMSAN (SI) LIMITED
Claimant

AND:

TORONTO CONNECTION (SI) LIMITED

First Defendant

AND:

GREAT WOODS LIMITED
Second Defendant

Date of Hearing: 25 November 2011
Date of Ruling: 12 December 2011

M. Pitakaka for Claimant/Applicant
R. Kingmele for Second Defendant/Respondent

RULING

Mwanesalua J:

1. The Applicant Samlimsan (SI) Limited filed this application on 10 November 2011, under rule 7.9 of the Solomon Islands Courts (Civil Procedure) Rules 2007 ("the Rules"). This Rule deals with application for interlocutory orders before a proceeding has started.

2. The Applicant applies for the following orders:

(1) A freezing order pursuant to Rule 7.14 and 7.15 that the First and Second Defendants and any other person be restrained from moving the equipment described as Komatsu 70LE66076, Komatsu 70EJ10392 and CAT966E from Solomon Islands or dealing with them within or outside Solomon Islands.

(2) An order that the Applicant files and serve its claim within 14 days.

(3) Any orders deems fit by the Court.

3. The Director of the Applicant, Mr Pau Kieu Hu, in support of the application to retrieve the equipment particularised in paragraph (1) above, from the First and Second Defendants, deposed that the First Defendant took possession of the equipment on or about October 2010 with a view of purchasing from the Applicant. He produced Exhibit marked "PK1" showing copies of an Invoice, Bill of Lading and Customs entry in respect of the equipment; on or about 12 September 2011, Mr Wong of the First Defendant, Mr Jong of the Second Defendant and Mr Junior Pau of the Applicant had a meeting in Honiara at the Second Defendant's office; in that meeting, it was agreed between the parties that Mr Wong would sell all the equipment to the Second Defendant. From the proceeds of the equipment, the Second Defendant would pay to the Applicant before 19 September 2011 for its equipment.

4. But neither Mr Wong nor Mr Jong paid any money to the Applicant for the equipment. The Applicant now intends to get its equipment back. However, the First and Second Defendants have avoided the Applicant. The Applicant now comes to Court to seek assistance to retrieve the equipment from the First and Second Defendants.

5. The Second Defendant opposes the application, and submits that the application should be dismissed on the grounds that it fails to comply with Rule 7.18 of the Rules in that: (a) there is no description of the assets nor value of the assets nor location of the assets; (b) no name and address of the owner of the assets and no identity of anyone else who may be affected by the order and the manner they may be affected; (c) fail to set out (i) how the assets to be subject to the order will form part of any judgment or its enforcement, and (ii) what will be done to preserve the assets; and (d) fail to include the usual undertaking as to damages.

6. The usual undertaking as to damages is defined in the Rules as follows:

"Usual undertaking as to damages" means that the party giving the undertaking undertakes that, in the event that the party is ultimately unsuccessful in the proceeding or is otherwise shown that the order to which the undertaking relates ought not to have been made, then the giver of the undertaking shall be liable (without further order) to pay such damages as any other party or person may have suffered as a result of the order being made, such damages to be assessed if not agreed.[1]

7. The Second Defendant says that the equipment which the Applicant seeks to freeze is used in the logging industry. The Second Defendant is a logging company. The freezing order of the equipment, which their client says has been purchased from Toronto, and which on the Applicant has agreed to sell to the Second Defendant, would affect the Second Defendant's operations. If such operation suffers from the freezing order, the affected party would look to the Applicant in these proceeding to recover its loss. It is not only the Second Defendant who would be entitled to look to the Applicant for damages, but any other party such as licensees affected by the disruption to the Second Defendant's operations. They would be entitled to be indemnified by the Applicant for any loss. Accordingly, the fact that the Applicant has not given the usual undertaking should be fatally determinative of its application.

8. The grounds upon which the Second Defendant submits that the application should be dismissed are set out in "a" to "d" of paragraph 4 above. As to ground (a), there is no evidence to establish that the Applicant has title to the equipment. The documentary evidence as exhibited to Mr Hu's statement is far from being of any helpful to the Court. The copies of the Invoice and the Bill of Lading are very difficult to read. Some portions of the documents are virtually impossible to read. The value and the location of each asset is not provided. As to ground (b), no name and address of the owner are provided in the application. As to ground (c), as to how the equipment to be subject to the order will form part of any judgment or its enforcement and what will be done to preserve them have not been set out in the application. As to (d), no usual undertaking by the Applicant has been provided in the application

9. The Applicant contends that Rules 7.18 is not mandatory. This Court holds the view, as the Second Defendant contends, that this Rule is mandatory. The first sentence of this "Rules reads"... "7.8 The applicant must....".

10. The Applicant submits that compliance with the Rules may be waived by the Court under Rule 1.3 of the Rules. That is true, but the power of Waiver vests with the Courts to enable them "to deal with cases justly with minimum delay and expense". That power is not intended to be used where parties to an application or claim have failed to comply with the Rules as in this application.

11. The Applicant submits that there is no need for it to make the usual undertaking in this application as the equipment have already been subject to an undertaking by the Dependants in another case. Or alternatively, the Court may make a Court Order for the Applicant to give the usual undertaking as to damages. The view of this Court is that, the usual undertaking to pay damages is made by the party seeking a freezing order. (See paragraph 5 above).

12. It is obvious that the Applicant did not comply with Rule 7.18 of the Rules, which is a mandatory. Importantly, the Applicant has failed to provide any undertaking for damages. In the circumstances, this application is refused and dismissed.

Order 1. Application refused and dismissed.

Order 2. The Applicant is to pay the Second Defendant's cost of this application.

Order accordingly.

THE COURT

^[1] See Schedule 4 of the Rules