IN THE COURT OF APPEAL OF
THE REPUBLIC OF VANUATU
CIVIL JURISDICTION
Civil Appeal Case No. 6 of 1999
 
IN THE MATTER OF:
A Mortgage dated the 28th day of September, 1993
AND IN THE MATTER OF:
The Land Leases Act 1983 (CAP. 163)
BETWEEN:
TONY VITA
Appellant
AND:
GIANCARLO CASTELLI and
MITA FINANCIAL SERVICES LIMITED
Respondents
Coram: Acting Chief Justice Vincent Lunabek
Mr. Justice J. Bruce Robertson
Mr. Justice John W. von Doussa 
Mr. Justice Daniel Fatiaki 
Mr. Justice Roger J. Coventry
Counsel: Mr. Kalkot Mataskelekele for the Appellant 
Mr. John Malcolm for the Respondents
Hearing Date: 9th May, 2000.
Judgment Date: 12th May, 2000.
 
JUDGMENT
 This is an appeal from the Judgment and Orders of Saksak J. made on 23rd June 1999 which empower the respondents (the plaintiffs in Civil Case 136 of 1996) as mortgagees to sell the allotments of leasehold land comprised in leases 12/0821/027 and 12/0822/046 (the land) registered in the name of South Pacific Properties and Investment Pty Ltd. (South Pacific). The order under appeal also empowers the respondents to enter into possession of the land pending sale and gives directions as to the application of rent received and the proceeds of sale. 
The appeal is brought by Mr. Tony Vita who appeared before Saksak J. by his representative Mr. de Robillard to oppose the orders sought by the respondents on the ground that he had an interest in the land which would be defeated by a mortgagee sale. It is not disputed that he has a sufficient interest in the outcome of the proceedings to prosecute this appeal. 
The appeal was listed before the Court of Appeal in October 1999 but was adjourned until these sittings to enable Mr. Vita to obtain legal advice. This followed a ruling by the Court of Appeal that Mr. de Robillard was not a registered legal practitioner in Vanuatu, and could not represent Mr. Vita. The notice of appeal, although signed by Mr. Vita was clearly drawn on his behalf by Mr. de Robillard. Mr. Kalkot Mataskelekele appeared on the resumed hearing of the appeal for Mr. Vita. Two of the stipulated grounds for appeal were specifically abandoned before us, and Mr. Mataskelekele sought to support the other grounds set out in the notice of appeal. 
On the hearing of the appeal Mr. Mataskelekele also made application to adduce new evidence which Mr. Vita contended supported the orders sought by him. After hearing argument, the Court ruled that the new evidence should not be admitted, and said that it would give reasons for that ruling in due course. Those reasons appear at the end of this judgment as it is necessary to first discuss the issues raised in the proceedings, and by the notice of appeal. 
This litigation has a long history. In about 1988 Mr. Vita obtained a grant of the leasehold interest in the land, and thereafter made plans to change the use of the land from agricultural to residential land, and to subdivide the land into many separate titles. To fund the project he entered into an arrangement with one Stephen Pellegrino. It is not necessary to go into the detail of all the events that Mr. Vita says then followed. It is sufficient for present purpose to record that the land became registered in the name of South Pacific which was intended to be a joint venture company in which Mr. Pellegrino and Mr. Vita were to have interests. Later Mr. Pellegrino and Mr. Vita fell out, and litigation commenced. Mr. Vita contended then, and still contends, that he was at all times to have and to retain a 50 % interest in South Pacific, and Mr. Pellegrino was to provide finance for the development project without mortgaging the land. Mr. Vita says that contrary to this arrangement his interest in South Pacific was watered down to less than 50% by the introduction of other shareholders, that he was excluded from the management of the company, and that the land was mortgaged by South Pacific to the respondents. 
It is plainly established in the present proceedings that South Pacific on 28th September 1993 executed a mortgage which describes "the mortgagee" as Giancarlo Castelli for a loan of AUS$200.000 and Mita Financial Services Limited for a loan AUS$100.000, in total AUS$300.000. The mortgage was duly stamped and registered over the land (by then subdivided into many allotments) on 8th December 1993. 
Mr. Vita commenced proceedings in the Supreme Court of the Republic of Vanuatu on 28th October 1994, Civil Case No. 140 of 1994. The defendants named were South Pacific and Mele Trustees Limited (from whom Mr. Vita had obtained the grant of the leasehold interest in the land). In these proceedings Mr. Vita sought orders that would return the land to him unencumbered by the respondents’ mortgage, and would extinguish the interest of South Pacific. 
The proceedings came on for trial before the former Chief Justice on 14th and 15th March 1996. (Certain documents filed in this action incorrectly record the trial as having occurred in 1997). The proceedings were settled upon the second day of the trial, whilst Mr. Vita was still under cross-examination. The settlement was agreed by counsel for the parties involved, and the terms of the settlement were set down in a deed prepared and dated on 15th March 1997. The parties to the deed were Mr. Vita, South Pacific, Stephen Pellegrino and Giancarlo Castelli. The deed was formally executed by the three individuals, although not by South Pacific. The settlement, having been agreed to by South Pacific’s counsel, is nonetheless binding on it. The deed records that Mr. Vita would pay AUS$100.000 to Stephen Pellegrino and AUS$200.000 Giancarlo Castelli within six months. Provision was made for the payment of accounting fees due by South Pacific to its accountants. The terms of the deed confirmed the beneficial shareholders in South Pacific as follows:- 
•	Mr. Vita 35% 
•	Mr. Pellegrino 35% 
•	Mr. Castelli 20% 
•	Mr. Rocky Urbano 10% 
(It was apparently necessary for the deed to record the shareholdings as the book keeping of South Pacific was in disarray, and the paper work necessary to record the issue of shares had not occurred). The deed envisaged that the shareholders would instruct their solicitors to regularise the affairs of the company, and instruct the directors to take the steps necessary to sell the land. The proceeds of sale were to be used to discharge the liabilities due to Mr. Pellegino and Mr. Castelli. Although the deed does not expressly state this fact, it is clear that Mita Financial Services Limited, one of the mortgagees, represents the financial interest of Mr. Pellegrino. Thus the deed also provided that Mr. Pellegrino and Mr. Castelli would release "any mortgage they may have or control over the said property on an individual title basis" to permit sale to occur. The terms of the deed provided that upon Mr. Pellegrino and Mr. Castelli being paid the monies due to them, they would transfer their shares in South Pacific to Mr. Vita. 
It is common ground that Mr. Vita did not make payment in accordance with the settlement to Mr. Pellegrino (or Mita Financial Services Limited) or to Mr. Castelli within six months or at all. 
The proceedings the subject of this appeal were issued on 15th October 1996 by the respondents as mortgagees seeking orders for possession and sale of the land. These proceedings were numbered Civil Case 136 of 1996. 
On 7th August 1997 Civil Case 140 of 1994 was struck out by consent with no order as to costs. The order of the Court directed that Civil Case 136 of 1996 be listed for hearing on 18th August 1997. 
After a series of adjournment Civil Case 136 of 1996 came on for hearing before Saksak J. on 27th October 1997. On 24th October 1997 Mr. Vita had filed a notice of motion seeking to join Mr. Silas Hakwa who had acted as his solicitor in Civil Case 140 of 1994, to have Civil Case 140 of 1994 reinstated, and to have that matter heard at the same time as Civil Case 136 of 1996. Mr. Vita also filed an affidavit which contested the validity of the settlement in Civil Case 140 of 1994 so that he could again assert an entitlement to have the land returned to him unencumbered by the respondents mortgage. 
On 28th November 1997 Saksak J. delivered reasons for judgment. He found that the respondents held a valid and enforceable mortgage over the land, that a demand for payment had been duly made in accordance with the terms of the mortgage, and that South Pacific had made no payment under the demand. His Lordship said:
"The answers to all these issues are in the affirmative and would have been enough to satisfy the Court to grant the Orders enforcing the Mortgage. However upon careful examination of the documents before the Court there are certain defects or omissions which must be attributed to the Plaintiff(s)." 
The defects or omissions identified by His Lordship were first, a failure by the respondents to exhibit copies of the leases for each of the allotment comprising the land over which the mortgage was registered, and secondly, problems which His Lordship perceived to exist in the deed dated 15th March 1996. Because of these matters an order for possession and sale was not made. Instead, His Lordship directed that the order made on 7th August 1997 in Civil Case 140 of 1994 be set aside, that Civil Case 140 of 1994 be restored and re-listed for hearing, and that it be heard ahead of Civil Case 136 of 1996. The application by Mr. Vita to join Mr. Hakwa was refused. 
The respondents appealed against the judgment and orders of 28th November 1996. There was no appeal or cross-appeal by Mr. Vita against the order refusing leave to join Mr. Hakwa. 
The Court of Appeal in Civil Case No. 8 of 1997 allowed the respondent’s appeal on 22nd October 1998, pointing out that an order to restore Civil Case 140 of 1994 could not, and did not, set aside the terms of the settlement made between counsel and recorded in the deed. That settlement would remain a bar to the prosecution by Mr. Vita of the allegations made by him in Civil Case 140 of 1994. 
The Court of Appeal set aside the orders of Saksak J. in so far as they related to Civil Case 140 of 1994, and directed that Civil Case 136 of 1996 be re-listed for hearing before Saksak J. on 10th December 1998. 
When the matter came on for hearing before Saksak J. on 10th December 1998 it was further adjourned to 5th April 1999, but with an order permitting Mr. Vita to file further affidavits within the next three months. After further adjournments, the matter came on for hearing on 22nd June 1999, and the judgment now under appeal was delivered on 23rd June 1999.
In his judgment, Saksak J. noted that his earlier findings that there existed a valid and enforceable mortgage, that a demand had been duly made for payment and that payment had not been made by the mortgagor had not been the subject of appeal. His Lordship stated that the omission of the respondents to file copies of the relevant leases had been remedied, and that the Court of Appeal had held that the issues raised by Mr. Vita in Civil Case 140 of 1994 had been determined by the settlement, and could not be re-litigated before a single judge sitting at first instance. 
Before his Lordship, on Mr. Vita’s behalf, Mr. de Robillard had argued that South Pacific had not been served with the originating summons, and that counsel appearing for the respondents should not be permitted to appear because of a conflict of interest said to arise because counsel had acted for another party in Civil Case No. 140 of 1994. His Lordship rejected both his arguments noting that service of the proceedings on the defendant was proved by an affidavit of service on file, and that there was no evidence before him that counsel for the respondent had a conflict of interest. 
The notice of appeal seeks the following orders:-
1. An order setting aside the orders for possession and sale of the land. 
2. An order that the orders of the Court of Appeal made on 22nd October 1998 be vacated. 
3. A declaration that the deed dated 15th March 1996 is null and void and of no effect. 
4. A declaration that Mr. Vita is the lessee of the land. 
5. An order that the respondents pay Mr. Vita’s costs of all the proceedings that have occurred. 
Mr. Mataskelekele helpfully identified the grounds of appeal advanced to support the orders sought on appeal by Mr. Vita. It is convenient to deal with those grounds in the order in which they appear in Mr. Mataskelekele’s written submissions. 
 
First order sought
It was contended that the orders for possession and sale should be set aside because Saksak J. said that he considered the only issues for him to decide were whether the parties had complied with the orders of the Court made on 10th December 1998, and of the Court of Appeal. That observation must be understood in the context that His Lordship has already pointed out that findings made in his judgment of 28th November 1997, against which there was no appeal, justified the making of the orders sought once the two defects or omissions identified had been rectified. It was argued that His Lordship failed to consider other arguments addressed by Mr. de Robillard, and erred in finding that Mr. Vita had failed to comply with orders of the Court as to the filing of affidavits. 
The other arguments said to have been overlooked, are canvassed in grounds 3, 4 and 5 of the Notice of Appeal. Ground 3 argues that His Lordship failed to take judicial notice of the fact that South Pacific had been wound up in consequence of orders made on 25th July 1996, and was later struck off the register of companies. There was no evidence at trial to support either of these propositions. Reference was made to a conditional order for the winding up of the company made on 25th July 1996. However, it appears that the order was never put into effect and we were informed from the bar table that the company was never placed in liquidation. Further, we were informed that whilst the company was struck out for failing to file an annual return and to pay fees on 18th March 1998 it was reinstated by order of the Supreme Court on 7th July 1998. If these facts had been properly established by evidence before His Lordship, they would have provided no ground for refusing the orders sought by the respondents. 
Ground 4 raises again the argument that there was no evidence of service of the proceedings on South Pacific. That argument is without merit. As His Lordship observed, service was proved by an affidavit on the file. 
Ground 5 asserts that His Lordship erred in rejecting without reasons submissions that the non-appearance of South Pacific at the hearing was material because the respondents’ counsel had an apparent conflict of interest. His Lordship did give reasons for rejecting this submissions. He correctly observed that no evidence had been advanced by Mr. Vita to establish any basis for alleging a conflict of interest. We are unable to find anything in the Court files which would suggest that such a conflict existed, and even if it did we are unable to see how that was a matter that was material to the issues which His Lordship was required to decide. 
 
Second Order sought
It was contended that the order of the Court of Appeal made on 22nd October 1998 should be vacated by this Court as the hearing was unlawful and unconstitutional because
a. Mr. Vita was not advised of the sitting until minutes before hand until he was told of it by a member of the Court staff.
b. Mr. John Timakata who appeared as a friend to Mr. Vita did not advise the Court of written instructions given to him by Mr. Vita.
c. It was clear to the Court of Appeal that Mr. Timakata was not sufficiently informed in order to properly represent Mr. Vita’s interests.
d. The Court of Appeal wrongly assumed that Mr. Vita had not sought legal advice from a legal practitioner in Vanuatu.
e. The Court of Appeal could not properly make any decision regarding the validity or binding nature of the deed of 15th March 1996 because "… at no time did it allow Mr. Vita to present a case in relation thereto. Mr. Vita was alleging undue influence by his then lawyer, Mr. Silas Hakwa, who quickly lost interest in Mr. Vita’s case after Mr. Vita had completed construction Mr. Hakwa’s home in exchange for Mr. Hakwa representing Mr. Vita. There is at law a presumption of undue influence in the lawyer client relationship …" 
f. The facts recited by Mr. Hakwa in a letter to Mr. Vita’s bank ought to have put the Court of Appeal on notice that Mr. Vita’s complaints were not unreasonable. 
g. The fact that Mr. Hakwa wrote to Mr. Vita’s bank should not bind Mr. Vita. 
In our opinion there is no substance in any of these grounds. Prior to the Court of Appeal hearing Mr. Vita was obtaining advice from Mr. de Robillard who was communicating as Mr. Vita’s agent. Mr. de Robillard was aware of the hearing date, and prepared written submissions in respect of the appeal for Mr. Vita. Mr. Vita signed those submissions on 9th July 1999 and filed them at the Court. The sittings of the Court of Appeal were well publicised. If Mr. Vita was not aware of the precise day in the week when the appeal was to be listed, that is the result of him not having adequately communicated with his agent or not having made inquiries at the Court. As events turn out, he was present when the matter came on for hearing. 
The Court of Appeal had before it the written submission prepared by Mr. de Robillard. We presume those submissions constitute the written instructions that were given to Mr. Timakata. No evidence has been placed before this Court to suggest that there were any other written instructions. 
The grounds of appeal were prepared by Mr. de Robillard who was not present at Court when the earlier appeal was heard by the Court of Appeal. The grounds of appeal are wrong in alleging that the Court assumed that Mr. Vita had not sought legal advice. That matter was discussed in open court and Mr. Vita explained the difficulties which he said he had encountered in obtaining the services of a lawyer. 
The observations made by the Court of Appeal regarding the deed of 15th March 1996 were based on factual evidence in the court files. If there were any submission or facts that could have been advanced against the conclusion expressed by the Court of Appeal, the opportunity to do so arose again at the hearing of this appeal. Nothing was advanced in submissions before us to suggest that the Court of Appeal erred in the conclusion previously expressed that the settlement reached on 15th March 1996 continues to bind Mr. Vita with the result that it is not open to him to re-litigate the matters alleged by him in Civil Case 140 of 1994. 
Notwithstanding events that have occurred since March 1996 no proceedings have been commenced by Mr. Vita to set aside the settlement. In the present proceedings an attempt to question the validity of the deed has been made, but a collateral attack of this kind cannot result in an order setting aside the settlement in other proceedings. However, apart from that procedural difficulty which Mr. Vita faces, he remains confronted by an insurmountable obstacle to setting aside the settlement, which the Court of Appeal pointed out on 22nd October 1998. That obstacle arises from the fact that after the settlement, Mr. Vita sought to take advantage of it. His agent, Mr. Hakwa, wrote a long letter to Mr. Vita’s bank on 6th April 1996 encouraging the bank, on the strength of the settlement, to provide funds to enable Mr. Vita to fulfil his financial obligations and proceed with the subdivisional development. Further, on 7th August 1997, some seventeen months after the settlement, he consented to Civil Case 140 of 1994 being struck out. Plainly that consent was based upon the settlement. 
In support of the second order sought it was also contended that as Mr. Vita was not represented before the Court of Appeal on 22nd October 1998, it was improper for the Court of Appeal to allow the notice of appeal to be amended, and, further, the proceedings were not in order as leave to appeal against the judgment of Saksak J. delivered on 28th August 1997, being an interlocutory judgment, was not granted. The second of these submissions is wrong in fact. Leave to appeal was granted by the Court of Appeal. It is correct that the grounds of appeal were amended at the hearing, but the amendments were not material to the issues now canvassed by Mr. Vita. The original notice of appeal squarely challenged the orders which had the effect of reinstating Civil Case 140 of 1994 and directing a trial of the issues in those proceedings. The amendment merely stated expressly what was already implied, namely that the appeal also challenged consequential orders which had been made to give effect to the main order. 
 
Third Order sought
We have already discussed the arguments advanced in support of the claim that this Court should set aside the deed 15th March 1996 and the settlement which it records. In our opinion this Court has no jurisdiction to make such an order in these proceedings, and in any event, for the reasons given, no basis for doing so has been established. On the hearing of the appeal Mr. Mataskelekele sought to introduce an additional ground of appeal supported by the new evidence that he sought to lead, namely that the deed was partly based on a false premise not known to Mr. Vita, namely that Mr. Pellegrino, a party to the deed had never given or paid the sum of $100.000 or any other sum to Mr. Vita as a loan or payment of any sort. We shall deal with that submission when giving our reasons for rejecting the application to lead new evidence. 
 
Fourth Order sought
This Court has no jurisdiction in these proceedings to make a declaration that Mr. Vita is the lessee of the land subject of the proceedings. No such claim was made at trial. Had such a claim been made by Mr. Vita at trial, for example by counter claim, the claim would have immediately encountered the obstacle that it sought to re-agitate issues concluded by the settlement in Civil Case 140 of 1994. 
 
Fifth Order sought
If Mr. Vita were to succeed in this appeal and obtain all the relief claimed by him there could be grounds for costs orders favourable to him. However as this appeal must fail, so too must his claim for costs. 
 
New evidence
Upon the hearing of the appeal Mr. Mataskelekele applied to lead new evidence. That evidence comprised an affidavit from Mr. Castelli sworn on 2nd May 2000, and additional oral evidence from Mr. Castelli and from Mr. Vita. The affidavit from Mr. Castelli deposed that he had been repaid the debt secured by the mortgage, and had given a verbal release to Mr. Vita and Mr. Pellegrino. The affidavit did not say where or when the payment had occurred, or give any information about the circumstances of the payment.
The written submissions of Mr. Mataskelekele informed the Court that the oral evidence would be as follows. Mr. Castelli would say that Mr. Pellegrino did not put any money into the project carried on by South Pacific in 1992-3, thereby bringing into question the validity of the mortgage of 28th September 1993. Mr. Vita would say that he had never been paid for the land from any person, and that he signed the deed of 15th March 1996 on the understanding that he would be able to raise finance to pay back South Pacific, not pay Mr. Castelli or Mr. Pellegrino. 
The Court of Appeal Rules 1973, which continue to apply in the Republic of Vanuatu, provide in Rule 27 (2) that:-
"(2) The Court of Appeal shall have full discretionary power to receive further evidence upon questions of fact, either by oral examination in court, by affidavit or by deposition taken before an examiner or commissioner: 
Provided that in the case of an appeal from a judgment after trial or hearing of any cause or matter on the merits, no such further evidence (other than evidence as to matters which have occurred after the date of the trial or hearing) shall be admitted except on special grounds."
This rule is in similar terms to Order 59 Rule 10(2) of the Rules of the Supreme Court 1965 (UK). Under that rule it has been held that special grounds exist where the evidence (a) could not have been obtained at the trial with reasonable diligence, (b) would or might, if believed, have a very important effect on the decision of the Court, and (c) is of a sort which inherently is not improbable: Phipson on Evidence 12th Edition, paragraph 1703. Further, new evidence will not normally be received unless it is relevant to issues raised on the pleadings upon which the trial at first instance occurred. It will be an extremely rare case where the interests of justice dictate that the Court should permit a new issue to be raised for the first time on appeal, and then only where the issue was not one that the party could have raised at an earlier time. The bare information given by Mr. Castelli in his affidavit that payment had been made to him did not assert any new fact which would affect the judgment under appeal. That judgment empowered the sale of the land to discharge the debt secured by the mortgage, and provided for the distribution of the proceeds. Without further information, Mr. Castelli’s affidavit suggests that the payment had been made to him after the judgment. If that were the case, the terms of the judgment would accommodate the payment. Sale would occur in accordance with the terms of the mortgage to enable the debt to Mita Financial Services Limited to be discharged. In so far as the debt to Mr. Castelli had already been discharged, no part of the proceeds of sale would go to him, but would otherwise be distributed in accordance with the directions of the Court. 
The affidavit of Mr. Castelli commences with the assertion that "I am one of the two mortgagees in a mortgage dated 28th September 1993 between South Pacific Properties and Investments Limited (Mortgagor), myself (First Mortgagee) and Mita Financial Services Limited (Second Mortgagee)." That assertion supports the respondent’s position that Mita Financial Services Limited is one the mortgagees. Taken literally the proposed oral evidence sought to be led from Mr. Castelli is not inconsistent with that proposition, because the terms of mortgage do not refer to an advance by Mr. Pellegrino. However Mr. Pellegrino and Mita Financial Services Limited should be treated as one and the same. So understood, the proposed oral evidence is not new. We have read the evidence given in Civil Case 140 of 1994 to ensure that we have not misunderstood Mr. Vita’s claims. In his evidence there he said (according to the notes of the former Chief Justice) "Mr. Pellegrino personally did not put any money to the company". Further, no explanation was given to the Court why the evidence of Mr. Castelli could not have been led at trial. 
The proposed new evidence from Mr. Vita in reality raises no new issues. It has never been suggested that Mr. Vita was or should have been paid money for the land as part the transaction. The arrangement was that in consideration of the transfer of the land to South Pacific, he would receive shares in South Pacific. The deed of 15th March 1996 confirms that he did receive an entitlement to shares. The fact (if it were the fact) that shares were not actually issued to him because the paper work of the company was in disarray did not disentitle him from his interest as a shareholder in South Pacific. The terms of the deed recognise the need for the affairs of the company, including its paper work, to be brought up to date. 
Mr. Vita’s proposed evidence that he signed the deed on a certain understanding is also not new evidence. The terms of the deed, on our understanding of it, recognised that finance would be raised to discharge the liabilities recognise by the deed. This would occur through the sale of allotments of the land. The proposed new evidence would have no material effect on the validity of the settlement or the deed. The proposed new evidence fails the requirement that it must have a material effect on the Court’s decision, and moreover, no explanation has been given for not leading the evidence before the trial judge. In this respect, it is to be noted that the order of 10th December 1998 gave Mr. Vita three months within which to file further affidavits adducing any evidence that he wish to rely on, and no affidavit was filed by him. 
The proposed new evidence should also be rejected on another ground. The evidence is directed to the collateral challenge on the validity and enforceability of the mortgage. In his judgment of 28th November 1997 Saksak J. held that there was a valid and enforceable mortgage over the land in favour of the respondents. That finding was not challenged by appeal or cross-appeal at that time, and was not challenged when the matter again came on for hearing before Saksak J. on 22nd June 1999. The evidence therefore seeks to contest an issue that was not contested before the trial judge on 22nd June 1998, even though it was open to Mr. Vita to do so at that time. The evidence should be rejected on the ground that it seeks to contest for the first time in the Court of Appeal an issue that could and should have been agitated at trial. 
For these reasons the Court of Appeal ruled that the new evidence should not be received. 
None of the grounds of appeal have been established. The appeal is dismissed, and it is ordered that Mr. Vita pay the costs of the appeal to the respondents.
Dated at Port Vila, this 12th day of May, 2000. 
Vincent LUNABEK, ACJ
Bruce ROBERTSON, J
John W. von DOUSSA, J
Daniel FATIAKI, J
Roger J. COVENTRY, J