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Naim Engineering Construction (Fiji) Ltd v New India Assurance Company Ltd [2013] FJHC 533; HBC208.2012 (16 September 2013)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No. HBC 208 of 2012

BETWEEN:

NAIM ENGINEERING CONSTRUCTION (FIJI) LIMITED, a duly incorporated limited liability company having its registered office situate at Level 3, Stage 2 R B Jetpoint Supercentre, Martintar, Nadi.
PLAINTIFF

AND:

THE NEW INDIA ASSURANCE COMPANY LIMITED, a limited liability company having its registered office at 2nd Floor, Harifam Centre, Grieg Street, Suva.
DEFENDANT

AND:

AON (FIJI) LIMITED, a limited liability company having its registered office at FNPF Place, Victoria Parade, Suva and head office at Level 3, R B Patel Jetpoint Supercentre, Martintar, Nadi and trading as Aon Fiji Limited.
THIRD PARTY

BEFORE : Acting Master Thushara Rajasinghe

COUNSEL : Ms. Tabuakoro L. N. of Koyas for the Plaintiff

Mr. Pillay of Gordon & Company for the First Defendant

Mr. Jamnadas K. D of Jamnadas & Associates for the Third Party

Date of Hearing : 10th September, 2013
Date of Ruling : 16th of September, 2013

RULING

1. INTRODUCTION
   

1. The Third Party Aon (Fiji) Limited filed this summons to strike out Defendant’s claim seeking an order that the defendant’s claim in the third party notice shall be struck out on the ground that it discloses no reasonable cause of action against the third party.
   
2. This application is made pursuant to Order 18 rule 18 (1) (a) and rule 18 (2) of the High Court Rules.
   
3. Order 18 rule 18 (1) states that
   

“the court at any stage of the proceedings order to be struck out or amend any pleading or the indorsement, on the ground that –

1. It discloses no reasonable cause of action or defence as the case may be,
   

And may order the action be stayed or dismissed or judgment to be entered accordingly, as the case may be.

4. Moreover, Order 18 rule 18 (2) provides the scope for applications made under O 18 r 18 (1) (a) where it states that;
   

“No evidence shall be admissible on an application under paragraph (1) (a)”.

2. THE LAW ON STRIKING OUT APPLICATION,
   

5. Justice Byrne held in Timber Resource Management Limited v The Minister for Information, The Minister for Agriculture, Fisheries and Forests, The Attorney General of Fiji and others ( HBC 0212 of 2000) that
   

“Time and again the court have stated that the jurisdiction to strike out proceedings under Order 18 rule 18 should be very sparingly exercised and only in exceptional cases where legal questions of importance and difficulty are raised – per Marsack J.A. in Attorney General v Shiu Prasad Halka (1972) 18 FLR 210 at page 215

In Hubbuck & Sons Ltd v Wilkinson, Heywood & Clark Ltd (1899) 1 Q.B.86 at page 96 Lindley M.R. said “the ...Procedure is only appropriate to cases which are plain and obvious, so that any master or judge can say at once that the statement of claim as it stands is insufficient even if proved to entitle the plaintiff to what he asks. The use of the expression “reasonable cause of action” shows the summary procedure.... Is only intended to be had recourse to in plain and obvious cases”.

6. Master Tuilevuka (as he then was) held in Sugar Festival Committee 2010 v Fiji Times Ltd (2012) FJHC 1404;HBC78.2010 (1 November 2012) that
   

“Court rarely strike out a proceedings on this ground. It is only in exceptional cases where, on the pleaded facts, the plaintiff could not succeed as a matter of law or where the cause of action is so clearly untenable that it cannot possibly succeed will the court act to strike out a claim. If the facts as pleaded do raise legal questions of importance, or a triable issue of fact on which the rights of the parties depend, the court will not strike out the claim.

7. The scope of the hearing of applications in this nature was discussed in Khan v Begum (2004) FJHC 430; HBC0153.2003L (30 June 2004) where Justice Connors held that
   

“it is said that the fact the court has this inherent jurisdiction is one of the characteristics which distinguishes the court from other institutions of the government. It is a jurisdiction, to be exercised summarily and as I have said, is in addition to the jurisdiction conferred by the rules. It is not in issue that if a party relies solely upon Order 18 rule 18 there no evidence may be considered by the court in making its determination but that limitation does not apply where the applicant relies upon the inherent jurisdiction of the court”.

8. In National MBF Finance (Fiji) Ltd v Buli (2000) FJCA 28; ABU0057U.98S (6 July 2000) held that
   

“the law with regard to striking out pleadings is not in dispute. Apart from truly exceptional cases the approach to such application is to assume that the factual basis on which the allegations contained in the pleadings are raised will be proved. If a legal issue can be raised on contention that the facts cannot be proved unless the situation is so strong that judicial notice can be taken of the falsity of a factual contention”.

9. In view of these judicial precedence, I find that in pursuant of O 18 r 18 (2) the scope of the hearing under Order 18 rule 18 (1) (a) is limited to the pleadings; however the court is allowed to take judicial notice on the falsity of any factual matter when it exercise the inherent jurisdiction of the court.
   
10. The third party stated in this summons that this application is made pursuant to Order 18 rule 18 (1) (a) and Order 18 rule 18 (2) of the High Court Rules. Accordingly I disregard the affidavit in opposition filed by the Defendant and the reply affidavit filed by the third party in this hearing.
    
11. The learned counsel for the third party merely stated that the notice of third party served on them does not disclose any reasonable cause of action. However, the learned counsel made no effort to particularize his contention in his oral submissions. He later conceded that the plaintiff may have a claim against them but denied the claim brought up by the defendant against them.
    
12. The learned counsel for the defendant submitted that they were not served the copy of the acknowledgment of service pursuant to O 12 r 3 ( 2) of the High Court rules, which prevented them to file their summons for third party direction under O 16 r 4. The counsel contended that if they had filed their summons for directions, they would have filed a proper third party claim against the third party by elaborating the cause of action against the third party. However, the learned counsel vehemently objected the submissions of the third party and submitted that the notice for third party claim has disclosed a reasonable cause of action.
    

100. THE LAW ON THE ISSUE OF REASONABLE CAUSE OF ACTION,
     

13. Justice Jitoko in “Prasad v Home Finance Company Ltd [2003] FJHC 322; HBC0116D.2002S (23 January 2003)” extensively discussed the issue of reasonable cause of action where his lordship held that
    

“what constitutes a reasonable cause of action or defence does not mean that the Court should delve into whether the claim or defence is likely to succeed. As Lord Pearson stated in Drummond Jackson v. British Medical Association [1970] 1 WLR 688, [1970] 1 ALL ER 1094 CA at P.1101: No exact paraphrase can be given, but I think a reasonable cause of action means a cause of action with some chance of success, when (as required by r.19 (2)) only the allegations in the pleading are considered......................

The Courts view and many decisions on this matter is clear: As long as the statement of claim or the particulars (Davey v. Bentinct: [1892] UKLawRpKQB 216; (1893) 1 QB 185) disclose some cause of action, or raise some question fit to be decided by a Judge or a jury, the mere fact that the case is weak, and not likely to succeed is no ground for striking it out. (Supreme Court Practice 1985 Vol. 1 p.306)........

It is therefore very clear that in both the exercise of its powers under O.18 r.18 and under its inherent jurisdiction, a Court may only strike out a Statement of Claim and dismiss the action if in the words of Lord Blackburn, in Metropolitan Bank v. Pooley (1885) 10 App. (As 210 at p.221, if and when required by the very essence of justice to be done".

14. At this point, I draw my attention to third party notice filed on 29th of November 2012, where the defendant has specifically stated the nature of their claim against the third party. The defendant claims a contribution and indemnity from the third party in the sum of $ 193, 919.02 together with related cost and damages. Alternatively, the defendant claims a contribution and indemnity from the third party for the balance sum due to the Act of God peril deductible excess of $ 435,000 should the plaintiff be found to only be required to pay a lesser excess of $ 100,000 or other such other lesser excess.
    
15. The defendant specifically set out the disputed question to be determined in the third party notice in paragraph 5 of the notice.
    
16. In view of the reasons set out above, I find that the defendant has disclosed a reasonable cause of action which needs to be determined by a judge in a proper hearing. The summons for strike out defendant's claim is therefore dismissed.
    

Dated at Lautoka this 16th day of October, 2013.

R.D.R. Thushara Rajasinghe
Acting Master of High Court, Suva