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Wati v Kumar [2012] FJHC 1037; Civil Action 45.2009 (27 April 2012)

IN THE HIGH COURT of FIJI
NORTHERN DIVISION at LABASA
CIVIL JURISDICTION

Civil Action No: 45 of 2009

BETWEEN :

BHAN WATI of Qila Taveuni, widow.

PLAINTIFF

AND:

VIJAY KUMAR of Qila, Taveuni, cultivator.
1st DEFENDANT

AND:

THE FIJI DEVELOPMENT BANK
2nd DEFENDANT

Counsels: Mr. A Ram of Gibson & Co for Plaintiff;
Mr. A Sen of Maqbool & Co for 1st Defendant; and
Mr. S Prasad of Sarju Prasad Esq. for the 2nd Defendant.
Date of Decision: 27 April 2012.

RULING

INTRODUCTION

This is an application for discovery made by the Plaintiff under Order 24 rules 2 and 3, and Order 7 rules 1, 2 & 3 of the High Court Rules.

The Summons for discovery was supported by an affidavit sworn by one Salendra Kumar which provided the reasons for the application. The application was opposed by the Defendants. In order to understand the application fully a brief outline of the facts and the relationship between the parties appears appropriate.

THE BACKGROUND FACTS

The Plaintiff is the sister in law of the 1st Defendant. Her husband, the late Mr. Shiu Prasad was the brother of the 1st Defendant and the eldest of the children of the late Mr.Bhagirathi of Qila, Taveuni. Mr. Bhagirathi died on the 6th of August 1977 and Mr. Shiu Prasad, the Plaintiff's husband died on the 28th December 1986.

The late Mr. Bhagirathi was the registered proprietor of a 68 acre piece of land at Tavumaca, Taveuni. He had six sons and five daughters.

In 1970 the late Mr. Shiu Prasad, with his father's permission built his own house on a portion of land adjacent to his father's house. This dwelling was further extended in 1980. The Plaintiff and her children still remain on this property.

When the late Mr. Bhagirathi died in 1977 the 1st Defendant became the Executor and Trustee of his father's will and on the 7th February 1979 the land was transmitted to him.

This land was later transferred to the 1st Defendant on the 23 June 1983. It appears that the father's wishes were that his land was to be divided equally between his children. Thereafter it was understood between the siblings that the 1st Defendant was to sub-divide the land and then transfer the portions to each of the siblings. Each party was to pay for the survey costs for their own lots. In this regard the Plaintiff was to be transferred two lots. One of the lots was the one on which the Plaintiff's husband's dwelling house stood and which is now the subject of these proceedings.

It is alleged by the Plaintiff that the 1st Defendant did not transfer to her this dwelling house lot notwithstanding that she had done all things necessary to enable the transfer to be affected. It is also alleged by the Plaintiff that instead of transferring this lot to her the 1st Defendant transferred it to himself and then sought to evict her from the land through a Section 169 of the Land Transfer Act application. It is further claimed by the Plaintiff that when this action to evict her failed the 1st Defendant then mortgaged the land to the 2nd Defendant. The Plaintiff then claims that the encumbering of this portion of land by the Defendants was fraudulent and that both the 1st & 2nd Defendants are parties to this fraud. She now seeks discovery of all documents relating to the mortgage.

The documents she wishes to discover from both Defendants as stated in the Summons are:-

(a). That the 1st and 2nd Defendant do give to this Court and the Plaintiff any other or further information, and disclose to the parties all documents papers, reports, records and files in connection with the 1st Defendant's dealings with the 2nd Defendant and in particu1ar the loan file created and conducted by the 2nd Defendant in connection with a loan given to the 1st Defendant by the 2nd Defendant with a declaration that the 2nd Defendant has no other or further information documents papers reports and records of any kind other then disclosed;

(b). That the 1st and 2nd Defendant do permit the Plaintiff and/or Solicitors and/or their authorized agents to view and inspect all documents papers, reports, records and files in connection with the 1st Defendant's dealings with the 2nd Defendant and in particular the loan file created and conducted by the 2nd Defendant in connection with a loan given to the 1st Defendant by the 2nd Defendant;

(c). That the Plaintiff and her Solicitors and/or their authorized agents be permitted to take notes of and obtain and take copies of all notes, documents, papers, reports, records and files in connection with the 1st Defendant's dealings with the 2nd Defendant and in particular the loan file created and conducted by the 2nd Defendant in connection with a loan given to the 1st Defendant by the 2nd Defendant and kept by the 2nd Defendant.

(d). That the Defendants do further disclose any other reports and information in their possession or power and provide reports and information of the same to the Plaintiff which may be within their possession, custody or power relating to 1st Defendant's dealings with the 2nd Defendant and in particular the loan file created and conducted by the 2nd Defendant in connection with a loan given to the 1st Defendant by the 2nd Defendant.

The 2nd Defendant in its opposition to the application states that it has no knowledge of the relationship between the Plaintiff and the 1st Defendant nor does it have any knowledge of the facts raised by the Plaintiff in support of the application. It admits that there is a mortgage but denies that they are a party to any fraudulent act resulting in the mortgage. The 1st Defendant on the other hand had indicated that he has no objection to providing the documents requested.

HEARING of APPLICATION.

The Plaintiff at the hearing of the application states briefly that:-

1. The documents needed to be discovered amounts to the whole of the loan file;

2. The 1st Defendant did not say anything about the loan from 2nd Defendant and the documents to be discovered needs to show that he is entitled to encumber the land;

3. The refusal by the 2nd Defendant is based on privilege and that no specific document have been asked for, there is no privilege;

4. The circumstances of the loan is pertinent to the Plaintiff's case;

5. The matters arising out of the pleadings must be disclosed;

6. The 1st Defendant has disclosed documents in his list of documents but denies the loan;

7. Voluntary disclosure not forthcoming therefore Court order is required;

8. Only fair that the 2nd Defendant disclose the file in the interest of justice and all relevant facts needs to be put before the court;

The 1st Defendant although earlier indicating that he has no objection to the disclosure now opposes the application by stating that:-

1. The Plaintiff makes the allegation of fraud and therefore he must prove the allegation the burden does not shift;

2. That Order 24 is no longer relevant and that the Summons as it stands is an abuse of process;

3. That the Plaintiff is alleging conspiracy by the Defendants (para. 25 (j) of the claim) but provides no particulars of conspiracy and if they rely on any material fact they must apply for specific discovery, this is a fishing exercise;

4. The Plaintiff have said that the particulars of fraud will be provided after discovery, they must know first the existence of the documents relating to the pleadings;

5. Question of privileged information.

The 2nd Defendant in his address agrees with the 1st Defendant and says that they did not disclose in their list of document what they consider to be privileged documents. They have been sincere and have admitted the existence of a loan. The application should be struck out with costs.

In reply to the Defendants submission the Plaintiff states that:-

1. That the pleadings is clear as to what the parties had done and that it is not for us to delve into the truth of the matter; and

2. That paragraphs 25 and 27 show that the bank file is a pertinent record of the matter;

3. That they have not said why the documents should not be disclosed and the banks chose to pick documents they feel should be disclosed and to say what specific documents is impossible.

DETERMINATION of the APPLICATION

The action against the 2nd Defendant is based on fraud. The Plaintiff is alleging that the 2nd Defendant had prior knowledge of her rights to the property before it secured the property on the 1st Defendant's application for a loan. In this regard it acted dishonestly and became a party to the fraudulent act of the 1st Defendant. On this basis the Plaintiff wants to discover every document the 2nd Defendant has in its possession regarding the dealing including reports, files or any other information in their possession. Put briefly, the whole loan file. The application was made under Order 24 rule 2 & 3 and Order 7 rule 1, 2 & 3 of the High Court Rules. The latter order refers only to general procedures of summons and other motions and is relevant only as to form.

Order 24 rule 2 & 3 states:-

2.-(1) Subject to the provisions of this rule and of rule 4, the parties to an action between whom pleadings are closed must make discovery by exchanging lists of documents and, accordingly, each party must, within 14 days after the pleadings in the action are deemed to be closed as between him and any other party, make and serve on that other party a list of the documents which are or have been in his possession, custody or power relating to any matter in question between them in the action. Without prejudice to any directions given by the Court under Order 16, rule 4, this paragraph shall not apply in third party proceedings, including proceedings under that Order involving fourth or subsequent parties.

(2) Unless the Court otherwise orders, a defendant to an action arising out of an accident on land due to a collision or apprehended collision involving a vehicle shall not make discovery of an documents to the plaintiff under paragraph(1).

(3) Paragraph (1) shall not be taken as requiring a defendant to an action for the recovery of any penalty recoverable by virtue of any enactment to make discovery of any documents.

(4) Paragraphs (2) and (3) shall apply in relation to a counterclaim as they apply in relation to an action but with the substitution, for the reference in paragraph (2) to the plaintiff, of a reference to the party making the counterclaim.

(5) On the application of any party required by this rule to make discovery of documents, the Court may-

(a) order that the parties to the action or any of them shall make discovery under paragraph (1) of such documents or classes of documents only, or as to such only of the matters in question, as may be specified in the order; or

(b) if satisfied that discovery by all or any of the parties is not necessary, or not necessary at the stage of the action, order that there shall be no discovery of documents by any or all of the parties either at all or at that stage;

and the Court shall make such an order if and so far as it is of opinion that discovery is not necessary either for disposing fairly of the action or for saving costs.

(6) An application for an order under paragraph (5) must be by summons, and the summons must be taken out before the expiration of the period within which by virtue of this rule discovery of documents in the action is required to be made.

(7) Any party to whom discovery of documents is required to be made under this rule may, at any time before the summons for directions in the action is taken out, serve on the party required to make such discovery a notice requiring him to make an affidavit verifying the list he is required to make under paragraph (1), and the party on whom such a notice is served must, within 14 days after service of the notice, make and file an affidavit in compliance with the notice and serve a copy of the affidavit on the party by whom the notice was served.

Order 16 rule 4 refers to third party directions and is not relevant to this application.
Order 24 rule 2 (1) is very clear on two things, the first is that in most actions started by writ, subject to some exceptions, the parties to the proceedings must make discovery and the second is the time in which this discovery is to take place. That within fourteen (14) days after the pleadings are closed parties automatically, without the need of a Court order, serve the other party their list of documents. More importantly together with this list is a notice letting the other party know that the documents can be discovered at their office within seven (7) days of the notice. Parties must then proceed to discovery and it is in the absence of discovery taking place in this way that an Order for discovery obtained by a Summons under Order 24 rule 3 can then take place.

The only exception to the above is where the Court orders that an issue or question in the cause or matter needs to be determined first under Order 24 rule 4, or in third party proceedings or in motor vehicle accidents or to an action for the recovery of a penalty recoverable by enactment.

This application is for discovery by an Order of the Court made under Order 24 rule 2(5) (a). The procedure for this type of discovery is found under rule 2 sub-rule (6). This sub-rule states, that the application, be by summons and must be made before the expiration of the period within which discovery is to be made under this rule. That is, it must be made 14 days after the close of pleadings. Order 18 rule 19 determines when pleadings are closed.

Order 18 rule 19 states that:-

(1) The pleadings in an action are deemed to be closed-

(a) at the expiration of 14 days after service of the reply or, if there is no reply but only a defence to counterclaim, after service of the defence to counterclaim, or

(b) if neither a reply nor a defence to counterclaim is served, at the expiration of 14 days after service of the defence.

(2) The pleadings in an action are deemed to be closed at the time provided by paragraph (1) notwithstanding that any request or order for particulars has been made but has not been complied with at that time.

The pleadings in this action are well and truly closed and the period of discovery under Order 24 has expired when this application was made. The way or the practice in this jurisdiction is for the parties to file a Summons for Direction under Order 25 to initiate the procedure for discovery. This is not the correct way for discovery to take place. An order given under the summons for direction are those orders necessary to prepare the matter for trial (after discovery) where the court deals with all matters both interlocutory or otherwise and then give directions as to the future course of the action keeping in mind the just and expeditious disposal of the action. Order 25 rule 1 (3) is the only rule under Order 25 which is specific to the discovery provisions of Order 24 rule 2. Order 25 rule 1 (3) states:-

(3) Where, in the case of any action in which discovery of documents is required to be made by any party under Order 24, rule 2, the period of 14 days referred to in paragraph (1) of that rule is extended, whether by consent or by order of the Court or both by consent and by order, paragraph (1) of this rule shall have effect in relation to that action as if for the reference therein to one month after the pleadings in the action are deemed to be closed there were substituted a reference to 14 days after the expiration of the period referred to in paragraph (1) of the said rule 2 as so extended.

The above rule affects discovery in two ways. The first is that in every matter in which discovery of documents is required under O24 rule 2 the period of 14 days referred to there is extended and the second is that the period of one month referred to in O.25 rule 3(1) is shortened to 14 days. The purpose appears to be to allow the discovery procedures under O24 r 2 to proceed unaffected. It makes sense to allow discovery of documents to take place first so that at the summons for direction hearing all matters necessary to bring the action to trial must be dealt with then. Otherwise the Court at the hearing of the summons for direction cannot exercise a discretion or give directions properly since there is nothing before it sufficient for it to give any directions. The end result is that the directions given are a mixture of directions under O24 and O25. The use of summons for directions under Order 25 as the initiating procedure for discovery appears to have been adopted because of our acceptance of discovery procedures as interlocutory and hence accepting O 25 rule 1(1) as the justifying provision. In this regard the comments of Justice Kermode in Shiu Pal Bidesi –v- Millers Limited (1976) 22 FLR 139 is worth noting he said at 140 that:-

Practitioners appear to be ignoring rules 1 and 2 of Order 24 which make automatic mutual discovery of documents mandatory unless the parties agree to dispense with or limit discovery. It could be that practitioners are interpreting 0.24r. 1(2) as permitting parties to dispense with discovery after an order has been made by the court for discovery. In my view if a party seeks an order of the court for discovery the court must assume that the party seeking the order has not agreed to dispense with discovery which is required under rules 1 and 2 and the court's assistance is sought under 0.24 r. 3(2) to compel the other party to make discovery. The notes to 0.24 r.3 indicate that the object of this rule is to obtain an order against a party who has not fulfilled his obligations under 0.24r. 1(2) in my view refers to the situation where a party is required by Order 24 to make discovery and not to the situation where the court has ordered discovery.

Although during Justice Kermode's time the Supreme Court Rules 1968 was in use Order 24 in that rule and in the present High Court Rules are exactly the same. Can this Court order discovery under O 24 r 3 in the absence of the parties complying with order 24 rules 1 & 2? Order 24 rules 1 & 2 ensure that discovery after the close of pleadings is mandatory, "...the parties to an action must make discovery by exchanging list of documents..." (O24 r. 2) (and in rule r.1...."there shall be discovery by the parties to the action.. of the documents in their possession." The parties are clearly under an obligation to pursue discovery themselves before coming to the Court for an order. Although the Court has an inherent jurisdiction and it could in special circumstances make an order for discovery but in these instances leave must first be obtained. But this is not what this Court is being asked to make. The Court is being asked to make an Order for the defendants to give discovery to the Plaintiff under Order 24 rule 3. This rule presumes that all attempts at discovery under rule 2 has been attempted and has failed. Order 24 rule 3 states:-

Order for discovery (O.24, r.3)

3.-(1) Subject to the provisions of this rule and of rules 4 and 8, the Court may order any party to a cause or matter (whether begun by writ, originating summons or otherwise) to make and serve on any other party a list of the documents which are or have been in his possession, custody or power relating to any matter in question in the cause or matter, and may at the same time or subsequently also order him to make and file an affidavit verifying such a list and to serve a copy thereof on the other party.

(2) Where a party who is required by rule 2 to make discovery of documents fails to comply with any provision of that rule, the Court, on the application of any party to whom the discovery was required to be made, may make an order against the first-mentioned party under paragraph (1) of this rule or, as the case may be, may order him to make and file an affidavit verifying the list of documents he is required to make under rule 2 and to serve a copy thereof on the applicant.

(3) An order under this rule may be limited to such documents or classes of document only, or to such only of the matters in question in the cause or matter, as may be specified in the order.

Effectively what this Court is now required to do is to make an order or orders for discovery because of noncompliance of directions for discovery given under Order 25. In my respectful view this cannot be done because the exercise of discretion available under Order 25 could not be exercised properly this way.

None of the Counsels for the Defendants raised the issue of the timing of the application or whether the application for discovery could be made at all under Order 24 at this stage. The reason for this is that for so long our discovery procedures have been initiated from Order 25 summons for directions and when that does not work the parties then make applications for directions under order 24 in a way similar to this. The problem which gave rise to our situation is understandable given the language of the High Court Rules and it is precisely because of this difficulty that other jurisdictions similar to ours to develop their own civil procedures for discovery which is more precise in the steps needed to be taken to achieve discovery using the same legal principles. In my view we cannot develop our discovery procedures better if we ignore that discovery should be first obtained under order 24. Order 24 after all was designed specifically for this purpose.

CONCLUSION.

Given the above reasons this Court is unable to grant the application for discovery made under Order 24 rules 2 & 3. This is not to say that the Plaintiff cannot obtain an order for discovery at all, the Plaintiff can still make an application for discovery under Order 24 rule 7 for specific discovery. It is not possible for this court to use its discretion and determine this application as an application for specific discovery simply because the considerations for specific discovery differ from those under Order 24 rules 2 & 3.

ORDERS

1. Plaintiff's application refused;
2. Costs in the cause.

.......................................
Master Harry Robinson
High Court, LABASA