IN THE COURT OF APPEAL
OF THE REPUBLIC OF VANUATU
(Civil Jurisdiction)
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Civil Appeal Case No.14 of 2001
BETWEEN:
CAPTAIN PAUL A. KIN
Appellant
AND:
I.A.C. PACIFIC LIMITEDn>
Respondent
p>
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Coram: Hon. Justice John von Doussa
Hon. Justice Bruce Robertson
Hon. Justice Daniel Fatiaki
Counsels: atrick Finnigan and Mr. John Malcolm for
Appellant
Mr. Nigel Morrison for the Respondent
Hearing date: 30th October 2001.
Judgment date: 1st November 2001.
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REASONS FOR JUDGMENT
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This is an appeal brought by
leave against an order of a single judgthe Supreme Court who refusrefused
leave to file an
Amended Statement of Claim, referred to in the papers as
the First Amended Statement of Claim (FASC).
This case is complex and has a
considerable background of interlocutory applics. Only the briefest
summary of the
principle issues involved is necessary for the purpose of
resolving this appeal. The Appellant, who it is convenient to refer
to as
the Plaintiff, issued his Writ and Statement of Claim on 11th
November 1998. As pleaded his claim was for under payment of remuneration
allegedly due to him under a contract of employment
with the Respondent (the
Defendant) dated 25th November 1996, as amended on about 30th
February 1998. The Plaintiff was employed as a pilot.
On 24th February
1999 the Defendant fileefence denying the claim, and pleading a
Counterclaimclaim which alleges that on 10th February 1999 the
Plaintiff defamed the Defendant in an advertisement. On 18th July
2000 the Defendant filed a further document entitled �Addendum Amending
Counterclaim� making another counterclaim
for damages for defamations
allegedly published by the Plaintiff in letters written in March and April
2000.
The Defendant in its
counterclaims alleges, amonther things, that the publications in their
natural aral and ordinary
meaning wrongfully asserted that the Defendant, which
is duly incorporated in Vanuatu as an international company, does not
comply
with the laws of the Republic of Vanuatu. In its defence to this
counterclaim the Plaintiff denies the defamations
on grounds that include
justification. One of the grounds pleaded in support of this plea is that
the Defendant has been
carrying on the business of an �employment
agency� as defined by s. 65 (3) of the Employment Act [CAP. 160]
without having observed statutory conditions and restriction imposed by s.
65 (2) of that Act. Another ground
pleaded is that the Defendant as an
international company in Vanuatu, carrying on business in Vanuatu and
carrying on
company management, contrary to the provision of s. 10(1)(a) and
(f) of the International Companies Act No. 32 of 1992.
On 3rd December 2000
laintiff filed a Notice of Motion seeking to amend the Stat Statement of
Claim in terms of the FASC.
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The FASC pleadee causes of
action. The first cause of action includes the claims in the original
al
Statement of Claim,
and expands the number of matters said to be the subject
of underpayment. An amendment to a Statement of Claim to include additional
items of the nature alleged would be the common subject matter of an
amendment. We do not understand the Defendant to
take the issue about this
aspect of the proposed amendment.
The second cause of action is a
claim that tfendant is entitled only to a reasonable commission,
suggested at 6 %
across the board, to be deducted from monthly universal
charges payments which the Defendant receives from Korean Airlines
Limited (KAL),
to which company the defendant (or an associated company) makes the
Plaintiff�s pilot services available.
There is a claim for additional
remuneration on the basis that s. 65 of the Employment Act would impose a
statutory prohibition upon the Defendant collecting any fees or expenses
from the monthly universal charges
payments. The Plaintiff alleges that for
this reason the whole of the monthly universal charges should be passed on
to
him, but he is prepared to concede that the Defendant should receive a
reasonable commission.
The third cause of action is in
the alternative to the second cause of actiondoes not make the
con concession about commission
charges of 6 %. It alleges that if the Court
finds that the Defendant is an �employment agency� in terms of
s. 65 of the Employment Act and is not licensed as required, the Defendant
is not entitled to charge any commission with the consequence that the whole
of the monthly universal charges payments should be paid to the Plaintiff.
As the second and the third of
these causes of action are alterns, and raise the same subjesubject matter,
they should
be treated as raising the same new issues in the Plaintiff�s
claim. The second and third causes of action squarely raise the
same issues
about s. 65 of the Employment Act which are already raised in the case by
the Plaintiff�s Defence to the Counterclaim.
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It appears from the reasons
publishethe primary judge for his decision giving leave to appeal teal that
he refused the
application for leave to amend the FASC because it introduced
causes of action that he considered had arisen after the commencement
of the
proceedings on 11th November 1998. He considered that for this
reason the causes of action should be the subject of fresh proceedings, and
added the observation that it would then be open to the Appellant to apply
to consolidate the new proceedings with the existing
action.
It is common ground that none
of the Plaintiff�s so called new causes of action areof time. No issue
ari arises under
the principle in Weldon �v- Neil [1887] UKLawRpKQB 161; (1887) 19 Q.B.D. 394.
There is however an issue whether the new causes of action in fact arose, or
should be treated as arising, after the
issue of the Writ. In reality the
same legal issues existed between the parties before the issue of the Writ,
and the
only events which have occurred since the issue of the Writ are that
month by month the Plaintiff says that there have been
additional payments
to him which have been wrongly calculated. It is doubtful whether events of
this kind fall within
the alleged principle that causes of action which
arise after the issue of the Writ should not be added by amendment to the
pleadings. It is frequently the case that losses running up to the date of
judgment are included in a judgment even though
part of those losses
accumulated after the issue of the Writ. However, for present purposes we
shall accept the Defendant�s
assertion that the second and third causes of
action sought to be added by the amendment arose after the issue of the
Writ.
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There is reason to question
whether the second and third claims raised in the FASC which alleges the
contraventions of
s. 65 of the Employment Act and s. 10 of the International
Companies Act are claims that can be maintained. It is questionable whether
these sections are intended to create private right of action
in the event
of breach. Moreover, even if s. 65 of the Employment Act does so, it is
difficult to see how the Plaintiff could have any claim for fees and
expenses improperly charged by the
Defendant. The limited factual
information before this Court suggest that whatever fees and expenses the
Defendant levies
on the monthly universal charges payments are charges which
the Defendant imposes on KAL, and are not fees and expenses paid
by or on
behalf of the Plaintiff.
In other circumss if leave
to amend in the terms of the FASC were granted these questions could
sensibly give rise
to an application to strike out the relevant pleadings
relating to s. 65 of the Employment Act and s. 10 of the International
Companies Act, and that situation in turn could be a reason for arguing that
leave to amend to include those claims should not be granted.
However, in
this case, even if the second and third claims were not included in the FASC,
the very same issues raised
by the second and third claims would have to be
considered and decided by the Court in dealing with Defence to the Cross
claims. Accordingly the questionable aspects of the merits of the second and
third claims provide no sensible basis to
refuse leave to amend in the terms
sought (or if leave is given, to entertain a strike out application made in
relation
to the FASC).
Where new claims are not out of
time, generally speaking there is nothing to bned by not allowing
e existing proceedings
to be amended to enable all matters in dispute between
the parties to be litigated in the one action. To do so is in accordance
with present concepts of case management. Procedural cases decided in
England in the Nineteenth Century which suggest
that in some situations this
should not be done must be understood in the knowledge that the management
of litigation
by Courts has greatly changed in the meantime. The practice
direction on Interim Case Management issued by the Supreme Court
of the
Republic of Vanuatu on 15th December 2000 summarizes the present
objectives of case management systems. It expresses the overriding objective
of
procedural rules in the following ways:-
�A. The overriding
objective
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ensuring that that the parties are on an equal footing;
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to the complexity of the issues; and
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allotting to it an appropriate share of the court�s resources, while
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There may however still be
cases where some of the new causes of actions which a plaintiff wishes to
incorporate by amendment
in the action are so unrelated to, and different
from, the presently pleaded causes of action that it is not sensible to
allow them to proceed together. Sometimes the causes of action so plainly
raise entirely different and unrelated issues
that it is best to allow them
to be the subject to separate proceedings and trial. However in this case
all the issues
raised in the FASC are in one form or another interrelated
with the original claim or with the counterclaims and the defences
thereto.
We think that the issues proposed to be raised by the FASC should sensibly
be joined in the action so that all
the issues between the parties are
resolved in one trial.
Thnciple which the primary
judge appears to have applied, namely that a cause of actionction arising after
the date of
the issue of the Writ should not be added by amendment to the
Statement of Claim, has its origins in Eshelby �v- Federated European
Bank Limited [1932] 1 KB 254, a decision of the Divisional Court in
England. That case held that a cause of action arising after the issue of
the
Writ could not be included in the Statement of Claim unless the Writ
itself was amended (in which event the amended writ would
date from the time
of the amendment). That decision was based on an English Rule of the Supreme
Court similar to Order
30 Rule 1 of the High Court (Civil Procedure) Rules
1964 which still apply in the Supreme Court of the Republic of Vanuatu.
An
analysis of the reasons for decision discloses two matters of particular
importance in the present case. The first
is that the Divisional Court at
261-262 dealt with another rule which is the equivalent of Order 26 Rules 1
and 2 of
the High Court (Civil Procedures) Rules 1964, and held that the
rule also prevented a defendant from pleading a counterclaim
which arose
after the date of the plaintiff�s writ. The application of that principle
would indicate that both the counterclaims
filed by the Defendant in this
case are brought contrary to the rules. If a strict application of the rules
prevents
the Plaintiff amending in terms of FASC, the two counterclaims
should also be struck out (although the Defendant could then
initiate a
separate action for defamation against the Plaintiff).
The other important matter is
that the English Supreme Court Rules under which Esh�v- Federated
Europearopean Bank Limited was decided, did not include a provision similar
to Order 22 Rule 2 of the High Court (Civil Procedure) Rules 1964 which
reads:-
�Whenever a Statement of
Cls delivered the plaintiff may therein alter, modify, or extr extend his
claim without any amendment
of the endorsement of the writ.�
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In our opinion Order 22 Rule 2
is designed to overrule the principle established in Eshelby �v-
Federated European Bank Limited, and to allow an amendment to a
Statement of Claim which includes a cause of action which has arisen after
the issue
of the Writ without the need to make a separate application to
also amend the Writ. In our opinion, as none of the new claims
sought to be
introduced by the FASC are out of time, and as they concern issues already
raised in the proceedings, there
was no good reason for refusing leave to
amend, and that leave should have been granted. Leave to amend given at this
time will also make regular the counterclaims that arose after 11th
November 1998.
It seems that both parties to
these proceedings are intent on taking every technical and tactical point.
This is regrettable
as the issues between them will ultimately come before
the Court anyway. The tactics which both parties are adopting, presumably
in
an effort to complicate and frustrate the aims of the other will serve
merely to delay the inevitable, and cause each
party additional expense in
the meantime. Case Management procedures are intended to avoid conduct of
this kind, and
to avoid the unnecessary utilization of scarce Court
resources which must be directed to deciding real and substantive issues
between litigants. If parties do not observe the overriding objectives of
the Practice Direction on Interim Case Management
they can expect that the
Court will impose on them costs sanctions, and adopt an interventionist
approach to the litigation
which discourages interlocutory applications, and
forces the substantive issues on for early trial.
The Court indicated to the
parties at the conclusion of oral arguthat the Appeal would be albe allowed,
and leave would
be granted to the Plaintiff to amend in terms not more
extensive than the FASC. The Court then discussed with the parties
procedural directions which should now be put in place to hasten the trial
of the issues between them. The Court urged
the Plaintiff to reconsider the
merits of the claims based on s. 65 of the Employment Act and s. 10 of the
International Companies Act. In this regard the parties should consider the
reasons for Judgment published by this Court contemporaneously with this
Judgment in the matter of Spooner �v- The Government of
Vanuatu, Appeal Case No. 4 of
2001. The Court
indicated to the Plaintiff that pursuant to the leave to amend the Plaintiff
was at liberty to delete or restrict
the scope of any of the causes of
action presently included in the FASC.
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Following discussions with
counsel, the Court indicated it would make orders and directions are set out
below in paragraph
1 � 6, and should reserve its consideration on the
question of costs. On the question of costs, a party who amends a pleading
is ordinarily ordered to pay the other party�s costs occasioned by the
amendment. We take that into account, but as the
Defendant has chosen to
oppose the FASC, and has lost this appeal it must pay a modest sum for costs
to the Plaintiff
which we fix at a gross sum.
For the reasons given, the
Orders of the Court areollows:-
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1. &nnbsp;;
Apan>Appeal allowed;
2.
/ Lpane tavthe ppellppellant to file the First Amended Statement of Claim
within 21 days in terms not more extensive than the
draft which accompanied
its Notice of Motion of 3rd
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3.
4.
Direct ehe Danendant within 28 days of rece theg the First Amended
Statement of Claim to file a new comprehensive Defence and
Counterclaim i suutionhose ntly e filpan>
5. &bsp; ;&nbssp;
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Dpan>Direct the Plaintiff within 21 days of receiving the Amended Defence
and Counterclaim to file its Reply and Defence to
Counterclaim;
6.
D rectPlhe tifintiff, or in default of action by the Plaintiff the
Defendant, within 7 days of the reply being filed to arrange
an early
dions hg bef Judgh the to final directionctions beis being
ng
m made pade prior to trial;
7. &bsp; ;
p Order that that the Plaintiff recover from the Defendant costs fixed at a
total sum of VT200,000 in respect of the Notice of
Motion dated 3
Justice J.on Doussa J.
Justice Bruce Robertson
Just Justice Daniel Fatiaki
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