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Walker v Owners of the Ship Belama II [2003] VUCA 6; Civil Appeal Case 27 of 2002 (9 May 2003)

IN THE COURT OF APPEAL
OF THE REPUBLIC OF VANUATU
(Admiralty Jurisdiction)

Civil Appeal Case No. 27 of 2002

BETWEEN:

WILLIAM WALKER
T/A BILL WALKER ELECTRICAL
Appellant

AND:

OWNERS OF THE SHIP BELAMA II
Respondents

Coram: Hon. Justice Robertson
Hon. Justice von Doussa
Hon. Justice Fatiaki
Hon. Justice Saksak
Hon. Justice Coventry

Counsels: Mr. Robert Sugden for the Appellant
Mr. John Malcolm for the Respondents

Hearing Date: 6th May 2003 & 9th May 2003.
Judgment Date: 9th May 2003.

JUDGMENT

The Belama II is a locally registered coastal shipping vessel owned by Harry & Wong Shipping Co. Ltd. and used for the ferrying of inter-island cargo including copra. The vessel required extensive work to be done to it in order to render it suitable for survey and to enable it to remain operational.

In about May 2000 the owners of the vessel entered into an agreement with the appellant to carry out necessary repairs and modifications to the electrical machinery and equipment on the vessel. Payment for the repairs was to be made upon production of the appellant’s invoice.

Over a period of 6 months between May to October 2000 the appellant carried out repair work on the vessel and for which numerous invoices were provided to the respondent totalling in excess of VT1.7 million. The respondent was irregular in its payments and was in substantial arrears. Correspondence was exchanged between the parties and their solicitors and irregular payments began in October 2000. In June 2001 the payments were increased and became more regular but by then the debt had increased as a result of interest. On 11^th July 2001 Court proceedings were instituted by the appellant’s solicitors in the Supreme Court and the vessel was arrested on 28^th August 2001.

On 11^th September 2001 the vessel was released on a principal of the respondent personally undertaking to pay the debt and payments recommenced from 15^th October 2001 into the defendant’s solicitors trust account.

On 12^th June 2002 the defendant filed a statement of defence and cross-claim for a sum in excess of VT1 million for the allegedly unlawful and quite unnecessary arrest and seizure of the vessel in August 2001. The debt had considerably reduced by this time and further correspondence was exchanged between the parties and their solicitors in an effort to settle the outstanding debt. Various offers and counter offers were made culminating in a hand delivered letter dated 19^th August 2002 from the defendant’s solicitors to the appellant’s solicitors enclosing their trust account cheque for VT720,000 ‘to resolve and in full and final settlement of all matters including costs’.

The trial of the action commenced before the learned Chief Justice on 26^th August 2002 and lasted for 2 days. At the commencement of the trial counsel for the respondents informed the Court of the above-mentioned settlement offer and cheque which had not been retracted nor had the cheque been returned.

The trial then proceeded with counsels’ opening and examination of witnesses on the sole question of whether or not a final settlement had been reached between the parties.

On 7^th October 2002 the learned Chief Justice made the following orders:-

“1. THAT the matter in Civil Case No. 92 of 2001 has been settled as to all matters on the provision of the cheque for VT720,000.

2. THAT, the costs are reserved.
   
3. THAT, the hearing of submissions as to costs is set on 5^th November 2002 at 1.30 p.m. o’clock.
   

4. THAT the reasons of the judgment be provided in due course.

On 23^rd October 2002 the respondent solicitors’ settlement cheque for VT720,000 was negotiated by the appellants’ solicitors.

On 5^th November 2002 a consent order was entered for the payment of the costs of the trial to the appellant in the sum of VT200,000. The order was however stayed pending the appeal which had been filed by the appellant the day before seeking to overturn the learned Chief Justice’s order that the appellant’s claim had been settled as to all matters on the provision of the cheque of VT720,000.

On 11^th April 2003 written reasons were provided by the Chief Justice. In it he rejected the appellant’s version of the fact that the respondent’s offer of VT713,000 was retracted and further that the cheque which was for an amount greater than the respondent’s offer to settle ‘has never been returned nor offered to be returned’.

It is common ground that at one stage in the settlement negotiations the appellant had offered to accept VT720,000 in full and final settlement of his claim. The offer however according to the appellant’s counsel was withdrawn or extinguished by a counter-offer by the respondent for a lesser sum and therefore was no longer available to be accepted by the respondent.

In seeking to explain or justify the encashment of the respondent’s solicitors cheque for VT720,000 before the lodgment of the appeal and after the Courts’ order of 7^th October 2002 appellant’s counsel writes:-

“It was not inconsistent with his decision to appeal to negotiate the cheque in order to ensure that there was money available to satisfy his non-extinguished claim if he succeeded in the appeal and was able to continue to pursue that claim. To do this was not an election not to pursue an appeal.”

We cannot agree with the submission which neither accurately or properly reflects the legal consequences of the appellant’s actions in negotiating the settlement cheque. There is also an air of artificiality in the submission which blithely ignores the existence of a counterclaim by the respondent for a sum in excess of VT1 Million which was foregone as a result of the settlement reached between the parties and which was plainly included in terms of the Order of 7^th October 2002.

In our considered view as at the 7^th of October 2002 there was a solemn judgment of the Supreme Court that all matters in the case between the parties had been settled by agreement and the provision of the cheque. The judgment bound both parties unless and until properly set aside on appeal. All competing claims by the parties were extinguished and all causes of action became subsumed by the settlement agreement which the judgment found had been reached between the parties.

At that juncture the appellant was faced with one of two distinct and alternative choices, either to appeal the judgment and return the settlement cheque or affirm it by accepting the cheque. At that point in time, because of the judgment which determined the rights of the parties, the only entitlement of the appellant to money from the respondent arose under the judge. The appellant chose the latter course and cannot now be heard to challenge the judgment which formed the sole basis for his entitlement to negotiate the settlement cheque.

The principle is one of common sense and plain justice and is alluded to in the judgment of Lord Russell of Killowen in Evans v. Bartlam (1937) AC 473 at p. 483 when his Lordship said:-

“The doctrine of election only applies to a man who elects with full knowledge of the facts. ... The doctrine of approbation and repprobation requires for its foundation inconsistency of conduct; as where a man having accepted a benefit given him by a judgment cannot allege the invalidity of the judgment which conferred the benefit .... The doctrine of estoppel requires the statement of a fact, upon the faith of the truth of which another alters his position.”

In the present case had the appellant disclosed or indicated to the respondent his intention to appeal the Court’s judgment. The settlement cheque could have been stopped by the respondent. As it was the appellant did not so indicate and instead negotiated the respondent’s cheque thereby unilaterally altering the respondent’s position to his detriment.

The artificiality of the appellants’ position is amply demonstrated in our view by counsel’s concession that despite the clear terms of the Court’s order, nevertheless the respondent’s counterclaim could somehow be proceeded with, and further, that the appellant’s position would be untenable had the learned Chief Justice merely rejected the settlement claim and proceeded to deal with the various issues in the case and awarded the respondent the sum of vT720,000.

The appeal must be dismissed with costs.

Dated at Port Vila, this 9^th day of May 2003.

BY THE COURT

Hon. Bruce Robertson J.
Hon. John von Doussa J.
Hon. Daniel Fatiaki J.
Hon. Oliver A. Saksak J.
Hon. Roger Coventry J.