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Mola v Phillip [2013] SBHC 135; HCSI-CC 465 of 2011 (4 October 2013)

IN THE HIGH COURT OF SOLOMON ISLANDS
Civil Jurisdiction

BETWEEN:

FRANCIS MOLA, FRANCIS SAWANE Jnr, DOMINIC WALEBALIA, JOHN WALETOFEA & GERENA SAWANE
Claimants

AND:

HARRY PHILLIP (Owner of HP Shipping Services)
First Defendant

AND:

THE MV FRANCIS GERENA
Second Defendant

Date of Hearing: 13 September 2013.
Date of Judgment: 4 October 2013.

Mr. C. Hapa for the Claimants
Mr. N. Laurere for the First Defendant
No appearance for the Second Defendant.

RULING

Apaniai, PJ:

1. This is an application by the Claimants for orders that the Admiralty Marshall take custody of the ship MV Francis Gerena ("Ship") subject to such terms as the court may impose or, alternatively, that the Second Defendant continue to operate the Ship on commercial basis subject to payment into court of all net monthly income derived from such operation and providing monthly information on the operational costs of the Ship for information of the court and the parties. The Ship is currently in the possession of the First Defendant.
   
2. I heard the application this afternoon and issued orders that, pending the determination of the First Defendant's appeal, the ship, MV Francis Gerena, shall remain in the custody of the First Defendant to operate and maintain and the profits thereof be paid into a joint trust account to be opened in the joint names of the solicitors for the parties; that the First Defendant shall submit a report to the Claimants or their solicitors at the end of each and every three months from the date hereof on the running of the ship indicating the total income earned and the expenses paid during the said three months period, such expenses to be supported by original receipts; that while the First Defendant comply with orders 1 and 2, the Claimants, their agents and servants are restraint from interfering with the running of the ship until trial of the said appeal or further order of the court; that in the event that the First Defendant fails to comply with orders 1 and/or 2, the Admiralty Marshall shall take, and keep, custody of the ship until trial of the said appeal or further order of the court; liberty to apply upon 7 days' notice; and, costs in the cause. I said I would give reasons later. I do so now.
   
3. The events leading to this application can be stated briefly. On 4 November 2011, a Memorandum of Agreement ("Agreement") was entered into between Francis Sawane of Waletofea Shipping Services and Mr. Harry of HP Shipping Services, First Defendant, in which the Ship was purportedly sold to the First Defendant.
   
4. On 29 November 2011, the Claimants filed a claim (amended on 2 April 2012) seeking declarations to the effect that the sale of the Ship to the First Defendant was invalid, null and void and on 28 December 2011, the First Defendant filed his defence to the claim and a counter-claim (amended on 16 April 2012) against the Claimants specific performance of the Agreement or, alternatively, for economic loss.
   
5. On 2 November 2012, the Claimants filed an application to decide a number of questions of law including whether the partners in Waletofea Shipping Services own equal shares in that business, whether the consent of all the partners is required for the sale of the Ship and whether the Agreement was valid.
   
6. The court heard the application and ruled on 31 May 2013 that the Agreement was null and void. Against that ruling, the First Defendant has filed an appeal to the Court of Appeal on 3 July 2013. The appeal is yet to be heard.
   
7. Pending the hearing of the appeal, the Claimants now come to court, by way of this application, seeking the orders mentioned in paragraph 1 above.
   
8. Counsel for the First Defendant opposes the orders sought. He argues that the ruling of 31 May 2013 was an interlocutory decision because the counterclaim by the First Defendant has not been decided at the hearing on 31 May 2013. He argues that since the ruling is now being appealed, the ship ought to remain in the possession of the First Defendant.
   
9. In my view, counsel's argument that the ruling of 31 May 2013 was an interlocutory decision is misconceived. In so far as the ruling has decided that the Agreement was null and void, that was a decision on the merits and is a final decision from the High Court. The ruling was not obtained on procedural grounds. It was a decision reached after considering the evidence adduced in court in relation to the validity of the Agreement.
   
10. However, the important points to note in this application are that the orders sought by the Claimants in this application are in the alternative. Paragraph 1 of the application seeks an order that the Admiralty Marshall takes custody of the Ship subject to such terms as the court may impose.
    
11. The alternative order sought in paragraph 2 of the application is that if the court refuses to grant possession of the Ship to the Admiralty Marshall as sought in paragraph 1, then the court may order that the Second Defendant continue to operate the Ship on commercial basis, but subject to payment into court of all net monthly income derived from such operation and subject further to the First Defendant providing monthly information on the operational costs of the Ship for information of the court and the parties. Those are the orders, which the applicants want in this application.
    
12. I understand from Mr. Laurere's submission that his client's position is that he should continue to have custody of the ship, a position which is quite agreeable to the applicants as shown by the orders they seek in paragraph 2 of the application. In fact, in her sworn statement filed on behalf of the applicants on 12 June 2013, Constance F. Sawane said on behalf of the applicants that, in the light of the appeal lodged by the Second Defendant against the judgment of 31 May 2013, the applicants did not wish to have immediate custody of the ship and that the Second Defendant could continue running the ship provided that the net income earned are preserved.
    
13. By objecting to paragraph 2, it seems to me that the position of Mr. Laurere's client, First Defendant, is that whatever income he earns from operating the ship should not be subjected to any control by any one. Unfortunately, as far as the order of 31 May 2013 is concerned, the First Defendant is no longer the owner of the ship and unless that judgment is set aside on appeal, the applicants remain the owners of the ship. As such, they are entitled to know how the ship would be run, how much income the ship would be earning, and, how much of that income is being spent in running the ship. I see nothing wrong with their demand.
    
14. It follows that the application is granted and, pending the determination of the First Defendant's appeal, the following orders made:-
    

[1] The ship, MV Francis Gerena, shall remain in the custody of the First Defendant to operate and maintain and the profits thereof be paid into a joint trust account to be opened in the joint names of the solicitors for the parties.

[2] That the First Defendant shall submit a report to the Claimants or their solicitors at the end of each and every three months from the date hereof on the running of the ship indicating the total income earned and the expenses paid during the said three months period, such expenses to be supported by original receipts.

[3] That while the First Defendant complies with order 1, the Claimants, their agents and servants are restraint from interfering with the running of the ship until trial of the said appeal or further order of the court.

[4] In the event that the First Defendant fails to comply with orders 1 and 2, the Admiralty Marshall shall take, and keep, custody of the ship until further order of the court.

[5] Liberty to apply upon 7 days' notice.

[6] Costs in the cause.

THE COURT

James Apaniai
Puisne Judge