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Austree Enterprises Pty Ltd v Guo [2015] SBHC 96; HCSI-CC 322 of 2012 (19 November 2015)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Holderness, J.)

Civil Case No. 322 of 2012

BETWEEN :

AUSTREE ENTERPRISES PTY LTD
First Claimant

AND :

ZHONG WHU ZHOU
Second Claimant

AND :

LING YUN ZHOU
Third Claimant

AND :

SHIYAO GUO
First Defendant

AND:

CHINA UNITED (SI)
CORPORATION LTD
Second Defendant

AND :

RAY CHU
Third Defendant

AND :

JUNBIN GUO
Fourth Defendant

AND :

JUNZONG GUO
Fifth Defendant

Date of Judgment: 19 November 2015

Mr.John Sullivan QC and Mr.Jayson Ward for the Claimants
Mr.Barnabas Upwe for the First Defendant
Mr.Gabriel Suri for the Second Defendant
Mr.Augustine Rose for the Third, Fourth & Fifth Defendant

RULING

1. Before the court is an application for an order vacating the trial date for this case. The trial is scheduled to commence on 23rd November. The proceedings were commenced more than four years ago in August 2011. Almost two months ago, on 22nd September, the Chief Justice, after hearing counsel for all the parties involved, directed that the case be listed for trial for six weeks commencing next Monday.

2. The application to vacate was filed on behalf of the second defendant last Friday, 13th November. The application is supported by the first defendant.

3. The court yesterday heard submissions from Mr Gabriel Suri for the second defendant, and from Mr Barnabas Upwe for the first defendant. I record that the first defendant is the principal shareholder, and that he is effectively the managing director of the second defendant.

4. The third, fourth and fifth defendants were not represented yesterday at the hearing of the application. Counsel for those parties, Mr Augustine Rose, was unable to attend. The court received advice that he was away from Honiara and, in fact, in Fiji. Mr Sullivan, QC for the claimants acknowledged that those three defendants would probably wish to support the application made by the second defendant. However, the court has received no formal notification of their position.

5. Mr Suri, in his submissions to the court, indicated that the second defendant has come to a realisation, and here I use Mr Suri's own words:

"...that it must strengthen the capacity of its legal representation."

In order to do so, the second defendant now wishes to instruct overseas counsel namely, Mr T Matthews QC, of Brisbane, Australia. Mr Matthews has had a previous involvement in the case. He, in fact, appeared for the second defendant when the appeal in respect of a preliminary point concerning stamp duty was heard by the Court of Appeal in late October 2012.

6. In supporting the application, Mr Upwe, for the first defendant, relies upon a different development namely, the impending appointment of Mr John Keniapisia as a Judge of the Court.

7. Mr Keniapisia appeared for the first defendant at the directions conference on the 22nd of September last, and again at a subsequent mention before the Chief Justice on 13th October 2015. As it happens, Mr Keniapisia is to be sworn in on the date scheduled for this trial to commence namely, Monday of next week. Following his swearing-in, Mr Keniapisia will thereupon commence his judicial duties.

8. As a result of Mr Keniapisia's appointment to the bench, Mr Upwe has very recently received instructions to take over the conduct of the first defendant's case. A statement sworn on 13th November by Suellen Kofana, a legal assistant in Mr Suri's firm, has been filed in support of the application. The court has read and considered that sworn statement.

9. There is also before the court a statement sworn by Mr Keniapisia on Thursday of last week, 12th November. That statement, and the documents annexed to it, disclose that Mr Keniapisia was advised by letter from the Registrar of this Court dated 6th October 2015 that he was shortlisted for an interview for judicial appointment and that the interview was to occur on 9th October. The letter annexed confirms that at some earlier date Mr Keniapisia had applied to be considered for judicial appointment. The Court has not been informed and is not aware of when he made that application.

10. The appointment of Mr Keniapisia was confirmed by letter dated 6th November from the Minister of Public Service. This letter is also annexed to the statement sworn by Mr Keniapisia. Also annexed is an email to Mr Matthews QC sent on the 7th of November advising that Mr Suri would prepare briefs of the case. The writer of the email, Mr Chris Guo, who is one of the defendants in the case, advised that he and Mr Suri were looking forward to instructing Mr Matthews. Mr Matthews replied by email to Messrs Suri and Guo on 9th November indicating a willingness to accept instructions for the trial. However, he advised that he would be unavailable until early February or early April 2016.

11. In his sworn statement, Mr Keniapisia refers to his appearance before the Chief Justice at the 13th October mention. He says this at paragraph 3, and I will read this paragraph: "

"After interview; I had received positive indication that I may become successful from the interview. I then started making arrangements with my client; the 1st defendant. At the last mention of the matter before Chief Justice; I raised the issue of my withdrawal and have also sought adjournment for my client to find a replacement lawyer. Additionally, I had indicated that my client was also looking to engage overseas Counsel."

12. Mr Keniapisia says further, and I read from paragraph 4 of his statement:

"To assist my client; since October I have spoken to two senior local lawyers to represent my client. Later in October they both responded negatively. The two senior lawyers are Maelyn Bird and Waleilia.

13. Paragraph5:

"Then in the month of October; we have through my client's son in Australia; tried looking for a solicitor from Australia. In November 2015; we managed to secure the services of Tim Matthews QC. But he will not be available in November 2015. He will however be available in February or April 2016."

There was then a reference to an Exhibit for confirmation of this.

14: At paragraph 6, Mr Keniapisia continues as follows:

"All the while I have been waiting for the result of my interview. Then on 6/11/2015; I have received a formal appointment letter."

There is then a reference to a further exhibit and the paragraph concludes as follows:

"I will be starting at the High Court in November 2016; on the 16th of Monday."

The Court notes an error in that paragraph. Clearly, the reference should have been to November of this year.

15. I will also read paragraphs 7 and 8 which are as follows.

"My sudden departure was only in the making in October and November 2015. This sudden departure meant that my client will not be ready to defend his case through a legal representative of his choice. Only this week I had transferred the file to a local lawyer. But I do not believe he will be ready to go to trial in the short period of time. This is a huge case with many documents to read."

"In the interests of justice, my client should be given more time to have his lawyer prepare for trial."

16. It is apparent from what I have traversed that both the first and second defendants have recently sought representation at trial by Mr Matthews QC. Furthermore, this is clear from the annexures to the sworn statement of Suellen Kofana. In my view, this tends to confirm an acceptance by the first and second defendants that, to a significant extent, their respective interests in relation to the case coincide.

17. The application is firmly opposed by the claimants. I heard detailed submissions from Mr Sullivan QC yesterday, amplifying the matters set out in his written submissions presented at the Hearing. In support of the opposition, a statement was sworn by Mr John Finau on the 16th November and filed in Court that day.

18. Before I refer to the substance of Mr Finau's statement, I note that annexed to it is a chronology of the case. It demonstrates that this has become, on any view of it, protracted litigation. The chronology commences by recording the claimant's application for an injunction in August 2011. Thereafter, the chronology extends to some 23 and a half pages and it lists a very large number of steps. Mr Sullivan mentioned the total during his submissions yesterday. The chronology sets out some 194 events.

19. By letter dated the 12th of November the claimant's solicitors confirmed their firm opposition to the application. The grounds were set out in some detail. The letter in question was written by Mr Dennis McGuire. The letter is annexed to the sworn statement of Sue-Ellen Kofana.

20. The Court notes that (inter alia) Mr McGuire raised the following points. After pointing out that the litigation has been ongoing for over four years and that the Chief Justice set the trial date on 22 September, the letter goes on to record the following, and I propose to read from, and including, paragraph 3 of the letter which is addressed to Suri's Law Practice, for the attention of Mr Suri.

Paragraph 3:

"At the time the matter was set down you informed the Court that you were unavailable between December and February 2015 and sought to have the trial further delayed until March 2016. Your submission on this point was entertained but rejected."

Paragraph 4:

"At the directions hearing on 13 October 2015 you made no mention of the briefing of overseas counsel. Some suggestion to that effect was made by counsel for the first defendant (Noting Mr Guo is both the first defendant and the directing mind of your client.)"

Paragraph 5:

"At this time the Chief Justice again stated that the cost of the trial had been budgeted for a period of 3 months allocated. As you would recall, he stated words to the effect that deferring the hearing of the trial was not an option."

The letter then refers to my appointment as Commissioner.

Paragraph 7:

"Your client and the other defendants have had our client's statements that they will rely upon for in excess of 14 months and the Deloittes Report for approximately 20 months. Your client has had ample time to brief other counsel; that they have chosen not to is a matter for it."

Paragraph 8:

"By your own admission, your client had previously briefed Mr Matthews QC in the matter but had chosen not to instruct him for some three years. This is a matter squarely between you and your client, its whim as to legal representation is not for the indulgence of the Court or the other parties in this matter."

Paragraph 9:

"We consider that as a previous Attorney General of Solomon Islands that you are well placed to conduct the trial. As a matter of legal principle, availability of counsel is not a valid reason for the adjournment of the trial. A large number of overseas counsel regularly appears in Solomon Islands, any one of which could be briefed in the matter."

Paragraph 10:

"Our own overseas counsel, Mr Ward, arrived in the Solomon Islands some days ago in preparation for the trial and as you are aware has appeared at most of the interlocutory applications brought over the last three years. It is not the case that the trial can simply be rescheduled due to his professional and other commitments in Australia and associated issues of availability."

Paragraph 11:

"In accordance with the Orders of the Court we have coordinated the attendance of interpreters from the Institute of Modern Languages at the University of Queensland in Brisbane, as well as the Courts expert witness, Professor Ling. We have also coordinated our own clients attendance at the trial from China and experts from Deloittes based in South Africa and Hong Kong. These arrangements have taken a great deal of effort to put in place at very substantial cost. They cannot be disregarded easily, further issues of availability have yet to be canvassed and there are no guarantees that your proposed trial dates could be met."

21. The letter written by Mr McGuire goes on to traverse other issues. I need not rehearse those at this point. There are several assertions later in the letter which Mr Sullivan referred to in his submissions.

22. The central issue for the Court to consider in relation to this application is whether, if the trial proceeds next week, the unavailability of Mr Matthews QC as preferred counsel, and of Mr Keniapisia and would so seriously and unreasonably prejudice the two defendants, named first and second, that the Court could not do justice to those parties. The Court must therefore carefully consider whether if those parties are instead to be represented at trial by Mr Suri and Mr, they would be d be seriously and unreasonably prejudiced to the extent I have mentioned.

23. However, the position of the first and second defendants is not the only issue for the Court to consider. The Court must attempt to strike a fair and proper balance between any potential or actual prejudice to those parties on the one hand and on the other hand the position of the claimants and the actual or potential prejudice and inconvenience to them which would, or would be likely to, arise if the trial was to be vacated with a further delay until a fresh trial date could be arranged at some future time.

24. It is clear from what I have read in the short time I have been in Honiara and from what I heard from Mr Sullivan QC yesterday that the claimants have engaged in extensive preparation in the perfectly proper expectation that the trial would commence next week. Furthermore, the claimants have made arrangements for expert and other witnesses to attend from overseas. Some witnesses have already arrived. Moreover, second counsel for the claimants, Mr Justin Ward, has been in Honiara from Brisbane for at least a week preparing for trial.

25. The Court is also aware that the evidence of several important witnesses will require translation. Steps have been taken to ensure the availability of that translation service from next week.

26. I am satisfied that all this has involved considerable financial outlay and that substantial time, effort and expense has been involved in obtaining an evidence transcript service out of Adelaide, Australia together with the arrangements for interpreters to be present from next week.

27. The Court is aware that Mr Suri has had a close and ongoing involvement in the case. He appeared as counsel with Mr Matthews before the Court of Appeal when the preliminary point was argued in 2012. The Court is satisfied that Mr Suri is experienced counsel of a senior status in Solomon Islands and furthermore that he is entirely familiar with the factual background of the case and the issues likely to arise during the trial.

27. In my view there is strength in Mr Sullivan's submission that further delay in the hearing of this case would significantly prejudice not only the claimants but also the Court and its administration. It has been necessary for Chief Justice Palmer to go to considerable lengths to accommodate this trial.

28. Because of the present limited judicial resources in the Solomon Islands, the Chief Justice has had to look overseas for judicial assistance. Hence my appointment as Commissioner which is for a period of three months commencing on Tuesday of this week, 17 November.

29. As I have explained to counsel, my availability to commence the trial in or about February of next year would, for personal reasons, be highly problematic, if not impossible. As Mr Sullivan pointed out yesterday, a trial commencement date in early February would leave only a very short period before the expiry of my commission.

30. Mr Sullivan relies on two High Court of Australia authorities. The first is Sali v SPC Limited [1993] HCA 47; [1993] 116 ALR 625. I refer in particular, but in this ruling I will not rehearse verbatim the observations of Brennan, Deane and McHugh JJ at [11] in Sali, where their Honours referred to the entitlement of a judge of a busy court to consider the effect of an adjournment on court resources, and the competing claims by litigants in other cases awaiting hearing, as well as the interests of the parties to the particular case.

31. That factor has taken stronger force in Australia since the other High Court of Australia judgment relied upon by Mr Sullivan, namely Aon Risk Services of Australia Limited v Australian National University [2009] 239 CLR 175. In that case, the court approved the approach taken in Sali, and re-emphasised the importance of regard being paid to the efficient despatch of litigation. In Aon, the High Court related the objective of quick, efficient and just disposal of cases to the case management system, and the need and desirability of regard being afforded to other users of the court system.

32. I am satisfied that not only is this court a busy one, with pressure in relation to its civil and other jurisdictions, but that it is also a court with limited judicial resources, particularly for the hearing of a lengthy case such as this. The case has therefore been carefully case managed, principally by the Chief Justice.

33. There is a public interest in the efficient use of court resources and this is a relevant consideration in the exercise of the court's jurisdiction and its discretion to adjourn a case set down for trial. See: Aon at [27] and [30] per French CJ.

34. It is appropriate that I rehearse what French CJ said at [30] or at least part of that paragraph. The Chief Justice said this:

Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or if vacation affects trial dates resulting in the resetting of interlocutory processes.

35. I bear in mind these observations, and the modern principles in relation to the exercise of the discretion to adjourn, as discussed by the High Court of Australia in the cases relied upon by the claimants. Mr Suri acknowledged that these cases are of persuasive authority in the Solomon Islands in relation to this application.

36. I turn to consider the matters relied upon by Mr Suri, for the second defendant. I am satisfied that for many months, if not over a longer period, Mr Suri and the second defendant have been fully aware of the nature of this litigation, and of whatever issues or complexities may arise during the trial. Given the emphasis given by Chief Justice Palmer at several pre-trial conferences and/or mentions as to the importance of progressing this case to trial, I am bound to record my firm view that the second defendant has left it far too late to come to a realisation that it "...must strengthen the capacity of its legal representation."

37. The desire of the second defendant, at this very late stage – indeed, at the eleventh hour – to instruct overseas senior counsel, is not a sufficiently compelling reason, in my view, to vacate the trial having regard to the inconvenience amounting, I am satisfied, to actual prejudice which would be suffered by the claimants if the application were to be granted. The court is satisfied that the second defendant's interests can be properly served by it being represented by Mr Suri, having regard to his experience and his knowledge of the case.

38. Based upon the matters raised on behalf of the second defendant, I am satisfied that the application should be declined.

39. Mr Sullivan QC quite properly expressed some sympathy for the position in which Mr Upwe finds himself as counsel for the first defendant. It seems to me, given the timing of the steps leading up to the impending judicial appointment of Mr Keniapisia, that Mr Upwe ought properly to have been instructed, and have received the file or files at a significantly earlier stage than has apparently occurred.

40. The court similarly has concerns for Mr Upwe's position. It is not an enviable one. Does that circumstance, and the consequent difficulties the first defendant may face in the early stages of the trial, as Mr Upwe becomes more familiar with the matter, outweigh the inconvenience and actual prejudice to the claimants to such an extent that the trial should be vacated?

41. Having carefully considered the matter, and carried out the balancing exercise required, I find that I ought properly to resolve this question in favour of the claimants. I have reached this view because I am quite satisfied that an order vacating the trial would involve significant actual prejudice to the claimants insofar as the substantial expense already incurred is concerned together with the considerable inconvenience which would be caused to witnesses to be called during the first phase of the trial, and to the interpreters for those witnesses.

42. Moreover, there would be inconvenience to expert witnesses to be called at a later stage of the trial who I have no doubt have already made scheduling arrangements. There would also be substantial inconvenience to counsel for the claimants who have prepared for a start next week.

43. The inconvenience to the court and its resources would also, I am satisfied, be substantial. I have no reason to doubt Mr Sullivan's submission which was not, in the event challenged, that if the case were to go back into the list for the scheduling of a further trial date before a judge visiting from overseas (if and when the services of such a judge could be secured) that an alternative date might not be available until well into next year, or possibly even, as Mr Sullivan foreshadowed, the following year. This would be, in my view, wholly unsatisfactory for the claimants and for the court and its proper administration.

44. For these reasons the application advanced on behalf of the first defendant is declined also.

45. A factor which strikes me as relevant, and which I have taken into account, is that the position of Mr Upwe's client is closely allied to the second defendant's position.

46. I wish next to record my view that it is proper, having regard to Mr Upwe's position, that he be given further, albeit limited, time to prepare. Mr Sullivan, very properly in his submissions, referred to this as a possibility. In my view, it is appropriate that the trial date be deferred for a short period until Wednesday, 25th November, to enable Mr Upwe to have some additional time to continue his preparation.

47. I understand that the first witness is not likely to be called until the second day of trial as Mr Sullivan has indicated that his opening address will likely occupy most, or all, of the first day. Mr Sullivan has undertaken to make available to the court a detailed synopsis of his opening. I direct that the synopsis be provided by 9.30 on Monday next, 23rd November. Mr Sullivan indicated that he might be able to provide it by this coming Friday. If he could do so, that would be appreciated by the court. Copies should of course be provided as soon as possible to counsel for the defendants.

48. I next wish to record that if, after the trial has commenced, Mr Suri and/or Mr Upwe wishes to apply to be joined by counsel to lead or assist either of them during the trial the court, on receiving appropriate notice, would be prepared to consider such an application. Again, Mr Sullivan in his submissions yesterday referred to this as a possibility, and I took him to have very properly indicated that he would not necessarily oppose such a course.

49. I turn next to the issue of costs. Mr Sullivan has sought indemnity costs. In the limited time available to me, I have considered the relevant rules, in particular, the rules set out in Chapter 24 of the Solomon Islands (Civil Procedure) Rules 2007. The application for an award of indemnity costs is strongly opposed by Mr Suri and Mr Upwe.

50. Having considered the matter, I am not satisfied that any of the grounds set out in rule 24.12 have been made out. In particular, this unsuccessful application has not, in my view, met the stringent test for a determination that it has amounted to an abuse of the litigation process.

51. The orders of the court are therefore as follows:

(1) the application to vacate the trial is dismissed;

(2) there will be an order for costs against the second defendant with certification for Queen's Counsel and overseas second counsel.

_____________________
Commissioner
D J R Holderness