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Just v Owners of the MV Mudcrab [1998] FJHC 178; HBG0001.1994 (31 March 1998)

IN THE HIGH COURT OF FIJI
(AT SUVA)
ADMIRALTY JURISDICTION

ACTION NO. HBG0001 OF 1994

BETWEEN:

HELMUT JUST
of 4 Jeffrey Street, Victoria, Australia,
Fishing Boat Master, and
OLAF JACOBSON GEDGE
of 3/90 Kingsford Smith Drive,
Albion, Queensland, Australia,
Engineer, and
DAVID DENNIS McFADYEN
of 3/10 Kingsford Smith
Drive, Albion, Queensland, Australia, Painter
Plaintiffs

AND

THE OWNERS OF THE MOTOR VESSEL
"MUDCRAB"
Defendants

S. Valenitabua for the Interested Party - Applicant
S. Inoke for the Plaintiffs/Respondents

Dates of Hearing and
Submissions: 4th, 11th December 1997
Date of Ruling: 31st March 1998

RULING

This is an application for leave to appeal from an order which I made on the 8th of October 1997 in an oral judgment delivered that day. I dismissed an application by one Hans Wilfred Reinhardt (hereinafter called Reinhardt) who issued a Notice of Motion on the 19th of July 1996 seeking an order that the Judgment entered in this Court on the 29th of November 1995 by the Plaintiffs against the Defendants be set aside. The Notice of Motion was signed wrongly by the solicitors for the Plaintiffs when in fact the solicitors were actually acting for Mr. Reinhardt who claimed to be an interested party.

In an affidavit sworn by Sevuloni Ratumaiyale Valenitabua a solicitor employed by the solicitors for Reinhardt it is stated that Reinhardt is and at all relevant time has been the owner of 32 shares in the vessel "Mudcrab" and has no knowledge of any debt whether imposed by law or incurred by him personally relative to his ownership of the vessel.

The Writ in the action was issued on the 1st of February 1994 by the then solicitors for the Plaintiffs claiming the sum of $AUD38,200.00 as the amount of wages due and owing to the Plaintiffs.

An Acknowledgment of Service on behalf of the Defendants was filed on the 17th of February 1994 and Judgment in Default of Defence was entered on the 7th of March 1994. The next day a Summons was issued on behalf of the Defendants seeking an order that the Plaintiffs provide security for the Defendants' costs on the grounds that the Plaintiffs were resident out of the jurisdiction and have no assets in Fiji.

A Warrant of Arrest was issued against the vessel "Mudcrab" then lying in Suva Harbour on the 25th of March 1994.

On the 21st of April 1994 a Notice of Motion was issued by the Defendants that the Default Judgment be set aside and that proceedings for the arrest of "Mudcrab" be stayed pending the determination of the substantive action.

In support of that motion one Peter Raymond Smith (hereinafter called Smith) swore an affidavit stating inter alia that he was the owner of the motor vessel "Mudcrab".

The matter came before me first on the 20th of June 1994 when I suggested that the parties would be well advised to have settlement discussions or at least try to agree on the issues in the case.

On the 27th of June 1994 I gave the Plaintiffs leave to swear and file any further affidavits thought necessary to crystallise the issues and facts. Three affidavits were then filed on the 31st of August 1994, two by the Second and Third-named Plaintiffs who deposed to an agreement on wages as the crew of "Mudcrab" allegedly made with Smith. The vessel was about to depart for Fiji on a fishing expedition.

The third affidavit was sworn by Peter John Brown of Sydney, New South Wales, a businessman who stated that the three Plaintiffs had assigned to him by Deed of Assignment absolutely all right, title and interest in their debts to him.

On the 5th of September 1994 the parties appeared before me again through their solicitors when by consent I ordered that the Default Judgment of the 7th of March 1994 be set aside and I fixed a date for hearing of the case on the 27th, 28th and 29th of March 1995.

I also ordered the Defendants to file and serve a Statement of Defence by the 19th of September 1994 and this was duly done.

The next step in the action occurred on the 27th of March 1995 when counsel for the parties requested me to adjourn the action sine die because it appeared that the parties were apparently doing business together again.

On the 29th of November 1995 the solicitors for the Plaintiffs appeared before me on a Notice of Motion seeking an order in terms of the Terms of Settlement filed in the Court on 20th of September 1995. Those terms recited that the Defendants were to pay the First-named Plaintiff the sum of $AUD7,000.00 together with interest of $AUD1,600.00; to the Second-named Plaintiff an amount of $AUD10,000.00 together with interest of $AUD2,000.00; to the Third-named Plaintiff an amount in the sum of $AUD21,000.00 together with interest of $AUD5,610.00 and upon payment by the Defendants to the Plaintiffs all costs in the sum of $AUD8,500.00.

All payments were to be made within five days of the date of the Terms of Settlement which were executed by Peter Brown and Peter Raymond Smith.

I then made an order in terms of the Terms of Settlement which was sealed on the 6th of December 1995.

Nothing more occurred in the action until the 19th of July 1996 when a Notice of Change of solicitors was filed on behalf of Hans Wilfred Reinhardt. It must be stated here that there were no solicitors on record acting for Reinhardt so that it was unnecessary to file any Notice of Change of solicitors for him. The purpose of the notice appears to have been to inform the Court that Messrs Q.B. Bale & Associates had been instructed to act on behalf of Reinhardt. On the same day Messrs Bale & Associates issued the Notice of Motion to set aside the Default Judgment of the 29th of November 1995 on four grounds, one of which I had already mentioned, namely that Reinhardt claimed to be the owner of 32 shares in "Mudcrab" and had never incurred any liability as to debt in respect of the vessel as it was operated at all times by Smith.

The other three grounds were:

(a) that the order made on the 29th of November 1995 was mistakenly made against the Defendant on mis-information placed before this Court;

(b) that any liability incurred against the Defendant was incurred severally by Smith and not jointly with Reinhardt;

(c) that the Terms of Settlement referred to in the order made on the 29th of November 1995 were executed by Peter Brown and Peter Raymond Smith only.

I have already referred to the affidavits by Sevuloni Valenitabua who filed a supplementary affidavit in which he stated that he had received further particulars from Reinhardt relating to the case and supporting the setting aside of the order of 29th November.

As far as relevant Reinhardt alleged there was no employment agreement between the owners or part-owner of "Mudcrab" and that the Second and Third-named Plaintiffs were never entitled to any wages from the owners of "Mudcrab". The affidavit alleged that the First-named Plaintiff was paid for his services on the 16th of April 1996.

The next step in the action was the filing of a Notice of Change of solicitors for the Plaintiffs on the 17th of September 1996. The Deputy Registrar of this Court gave the Plaintiffs leave to file an Affidavit in Reply to those on behalf of Reinhardt and on the 22nd of January 1997 such affidavit was filed by one Virendra Singh the Chief Law Clerk in the employ of the new solicitors for the Plaintiffs.

Mr. Singh deposed so far as I found relevant

(i) Reinhardt had no locus standi to ask this Court to set aside the judgment of the 29th of November 1995;

(ii) that as admitted in the first affidavit filed on behalf of Reinhardt, Reinhardt was at all relevant times part-owner of "Mudcrab";

(iii) that the only person having locus standi to set aside any judgment was Peter Raymond Smith and that if Reinhardt were aggrieved by the entry of the judgment his only course was to commence proceedings against Smith on the basis of an indemnity entered into between Smith and Reinhardt.

Mr. Singh exhibited to his affidavit a copy of this indemnity made between Reinhardt and Smith on 4th of February 1994 which is not denied by Reinhardt who however alleged through Sevuloni Valenitabua in an affidavit sworn on the 14th of March 1997 that Reinhardt did not give any prior consent in writing or otherwise to Smith to execute the Terms of Settlement.

I will refer again shortly to this affidavit of Mr. Valenitabua but before doing so set out a copy of the indemnity which is addressed to Mr. Peter Raymond Smith, c/- M.V. "Mudcrab", Suva and reads as follows:

"Dear Sir

Re: 'M.V. Mudcrab'

I, Hans, Wilfred Reinhardt hereby confirm and acknowledge that you can sell your 32 shares in the MV Mudcrab and this letter will serve as my consent to the same and as required by clause 1(ii) of the Agreement between us dated 3rd August 1992.

I hereby also confirm that you will indemnify me against all claims being made upon the 'MV Mudcrab' by Helmut Just, Olaf Jacobson and Dennis McFadyen in High Court of Fiji Admiralty Action No. HBG001 of 1994. Your consent to this agreement hereunder will signify your entering into this indemnity with me.

Yours faithfully

Sgd.

......................

Hans Wilfred Reinhardt

I, Peter Raymond Smith hereby confirm that I shall indemnify Hans Wilfred Reinhardt for any claims or judgment obtained by the three crewmen in High Court of Fiji Admiralty Action No. HBG001 of 1994 against him.

Sgd.

...................

Peter Raymond Smith

Sgd. Kapadia

Witness: ................

Solicitor

Suva

Dated this 4th day of February 1994."

Continuing in his affidavit Virendra Singh exhibited a copy of an affidavit sworn in Suva on 4th of November 1996 by Peter Raymond Smith. Paragraphs 4, 5, 6, 7, 8 and 17 are relevant here and which I now set out.

"4. During the month of February 1994, a writ of summons was served on the said vessel claiming unpaid crew's wages.

5. Reinhardt, who was in Fiji at the time the writ was served, accompanied me to a solicitor, Tevita Fa and Co., and we engaged the solicitor to mount a defence.

6. At the time, Reinhardt said to me:

"You are managing the boat, you'd better look after this, I can't keep coming back and forth to Fiji. I'll send some money to pay for the solicitor's fee". However he didn't.

7. Reinhardt further said:

"If you screw up, it's your problem, I want you to indemnify me against any liabilities coming from this case".

8. I signed an indemnity agreement at the office of Sherani and Co. in Suva, Fiji on or about 4th February 1994.

17. At all times whilst I was the REGISTERED AGENT/MANAGING OWNER of the vessel "Mudcrab", I had the full authority of Hans Reinhardt to do whatever I considered necessary with matters concerning the vessel."

Reinhardt through his solicitor does not deny the contents of the above paragraphs.

Another affidavit was filed on behalf of the Plaintiffs by leave by Peter John Brown who exhibited to it a copy of entries in the Sydney Registry of the Supreme Court of the New South Wales covering registration of the judgment of the 29th of November 1995 in that State on the 29th of July 1996.

The parties appeared before me on 8th of October 1997 on the hearing of Reinhardt's application and having heard submissions by Mr. Inoke on behalf of the Plaintiffs and Mr. Valenitabua on behalf of Reinhardt, having previously read all the relevant affidavits which I have of necessity referred to so far in this judgment, I then gave a brief oral judgment dismissing the motion by Reinhardt. I held that Reinhardt had no locus standi in the matter and that the Terms of Settlement on their face were valid so that if Reinhardt was affected by the judgment he had his remedy to sue Smith under the indemnity.

Greatly influencing my decision was also the apparent inconsistency between the statement by Sevuloni Valenitabua in his first affidavit that Reinhardt had no knowledge of any debt incurred by him personally relative to his ownership of "Mudcrab" and the fact which he has never denied that both he and Smith attended in the office of Mr. Tevita Fa their former solicitor in February 1994 for the purpose of Mr. Fa drawing a defence and the subsequent indemnity given by Smith to Reinhardt.

Also relevant to my mind was Clause 8(ii) of an Agreement dated 3rd August 1992 between Smith and Reinhardt exhibited to the affidavit of Mr. Valenitabua on the 14th of March 1997 which stated so far as relevant:

"8. Subject to the arrangements and conditions set out in this Agreement being performed by Mr. Reinhardt, Mr. Smith undertakes:

(ii) that while the Vessel is engaged in the Venture, it shall be under Mr. Smith's operational control and all legal or financial liabilities outside the ambit of the Venture or the Company shall be to Mr. Smith's account."

Coming at long last now to the Notice of Motion for leave to appeal I have taken written submissions by the parties and see no reason why leave should be granted for Reinhardt to appeal. I still maintain my view that Reinhardt has no right in law to ask for the judgment entered by the Plaintiffs to be set aside. His proper course of action in my view is to take proceedings against Smith alleging that the Terms of Settlement were entered into without authority and to rely on the indemnity made between them on the 4th of February 1994.

I have read the various cases cited to me by the parties and note among others Marsden v. Marsden (1972) 2 ALL E.R. 1162 on which Reinhardt places much reliance. This was a decision of Watkins J., as he then was, in the Family Division of the English High Court in which His Lordship set aside an agreement for maintenance entered into by counsel for the wife contrary to the express instructions of her solicitor. Watkins J. set aside the agreement on the ground that it was made without authority. That, if I may say so with respect, was clearly right but the facts of Marsden are different from those in the instant case and in any event Reinhardt is, as I have said a number of times in this judgment, not precluded from suing Smith if he believes the Terms of Settlement were entered into without Reinhardt's authority.

I can see no reason why the Plaintiffs nearly 2½ years after judgment was entered in their favour should be denied the fruits of their judgment. For these reasons I refuse leave to appeal and order Reinhardt to pay the Plaintiffs their costs of the application.

JOHN E. BYRNE
JUDGE

Case referred to in ruling:

Marsden v. Marsden (1972) 2 ALL ER 1162

The following legislation and authorities were referred to in argument:

Property Law Act Cap. 130.
Chandless-Chandless v. Nicholson (1942) 2 ALL E.R. 315.
K.R. Latchman Brothers Ltd. v. Transport Control Board & Others Civil Appeal No. ABU0012 of 1994 unreported judgment of Court of Appeal dated 27th May 1994.
Egerton v. Jones (1939) 3 ALL E.R. 889.
Darrel Lea (Vic) Pty Ltd. v. Union Assurance Society of Australia Ltd. [1969] VicRp 50; (1969) VR 401.
In re Schwabacher. Stern v. Schwabacher [1907] UKLawRpCh 39; (1907) 1 Ch. 719.
Slatter Rex & Co. v. Ghosh (1971) 2 ALL E.R. 865.