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Gidley v Mele [2007] VUCA 7; Civil Appeal Case 34 of 2006 (5 April 2007)

IN THE COURT OF APPEAL
OF THE REPUBLIC OF VANUATU
(Civil Appellate Jurisdiction)

Civil Appeal Case No.34 of 2006

BETWEEN:

ISOBELLE GIDLEY
First Appellant

AND:

VANUATU INDIGENOUS DEVELOPMENT ALLIANCES LTD
Second Appellant

AND:

TAMATA MELE
Respondent

Coram: Hon. Chief Justice Vincent Lunabek
Hon. Justice J. Bruce Robertson
Hon. Justice Hamlison Bulu
Hon. Justice Christopher Tuohy
Hon. Justice John Mansfield

Counsel: Mr Edward Nalyal for the 1st and 2nd Appellant
Mr George Boar for the Respondent

Date of Hearing: 4 April 2007
Date of Decision: 5 April 2007

JUDGMENT

This is an amended notice of appeal filed by the Appellants on 13 March 2007 following an initial appeal of 17 November 2006 against the Judgment of the Supreme Court in Luganville of 19 October 2006 on the assessment of damages in favour of the Respondent.

In one of the grounds of appeal the Appellants also challenge the orders issued by the trial judge in Luganville on 12 June 2006 striking out the defence and counter-claim of the Appellants (then defendants).

The Respondent, Tamata Mele, filed a claim on his own behalf and on behalf of 6 others against the First and the Second Appellants, seeking damages to be assessed. The trial judge in the course of trial preparation, issued a series of directions as part of the active management of the case. For reasons only known to them, the First and Second Appellants failed to comply with these Court directions orders.

On 7 April 2006, all parties were present and the trial judge adjourned the case with the consent of all parties to 12 June 2006 for hearing. On 12 June 2006, neither of the Appellants appeared in person or by counsel.

The Claimant, then, made an oral application for the Court to issue a summary judgement against the Appellants. The judge considered the application and issued the following orders:

(1) That the defence and counter-claims of the Defendants be hereby struck out in their entirety.

(2) There be summary judgment entered in favour of the Claimant.

(3) The Claimant’s claims are deferred for proper assessments pending the Claimants filing their further sworn statements within 21 days from the date hereof.

(4) The Defendants have 14 days thereafter to respond.

(5) Costs are in the cause.

(6) Assessment be made on a date to be notified.

The assessment of the damages was set for hearing on 10 and then on 12 October 2006. Mr Warsal appeared on behalf of the Appellants on 10 and 12 October 2006 and sought an adjournment which was granted to him. The assessment of damages was set for hearing on 19 October 2006.

On that date none of the Appellants were present nor represented. Ms Isobelle Gidley, the First Appellant, sent a facsimile letter to the Court Registry seeking an adjournment. Mr George Boar for the Respondent objected. The trial judge refused the adjournment and proceeded to hear the evidence on the assessment of damages. On the basis of his findings the trial judge entered judgment in favour of the Respondent and others and issued the following orders:-

(1) "The Claimants are entitled to damages in the total sum of VT4.113.213.

(2) In addition they are entitled to the costs of and incidental to the action.

(3) Further they entitled to their wasted costs of attending on 10th and 12th October 2006 which are assessed at VT56,600.

(4) The Defendants be liable jointly and severally for the sums of VT4.113.213 together with costs awarded at paragraphs (2) and (3) of this Order.

(5) The Defendants be given 28 days to pay the judgment sums plus all costs."

The Appellants now appeal against the judgment of 19 October 2006 on the grounds as advanced and challenge also the basis of the orders of 12 June 2006.

The Appellants seek orders that this Judgment and orders be set aside and the matter be remitted to the Supreme Court.

The grounds of appeal can be essentially summarised as follows:-

First, the trial judge erred in law in striking out the defence and counterclaim of the Appellants (then Defendants) on 12 June 2006 when the matter had not been heard or tried and there was no basis for the trial judge to strike them out as he did on 12 June 2006.

Second, the learned trial judge erred in law in issuing a summary judgement on 12 June 2006 contrary to the requirement of the rules.

Thirdly, the judge, erred in law by entering the judgment of 19 October 2006 by relying on the summary judgment of 12 June 2006 which was entered in error.

These three (3) grounds of appeal will be dealt with in turn.

On the first ground, the Appellants submit that it was not open to the judge to strike out the Appellants’ defence and counterclaim under rule 9.10(1) and (2) of the Civil Procedure Rules. It appears from the judgment of 12 June 2006 and 19 October 2006 that the judge must have struck out the defence and counter-claim of the Appellants under rules 6.8(2) and (3) after the trial preparation conference under part 6 of the Civil Procedure Rules. The relevant sections of the rules are Rules 6.7 and 6.8. They provide as follows:

"Time for compliance with orders made at conferences

6.7 When the judge makes an order at a conference, the judge must also:

(a) fix the date and time within which the order is to be complied with; and

(b) record the order in writing.

Effect of non-compliance with orders made at conferences

6.8 (1) If:

(a) a party does not comply with an order made at a conference by the time fixed for complying; and

(b) another party incurs expense because of this;

The judge may order costs against the non-complying party or his or her lawyer.

(2) If a party or his or her lawyer has failed to comply with an order made at a conference without reasonable excuse, the judge may order that the party’s claim or defence be struck out.

(3) A judge may set the proceeding down for trial although some orders made at a conference have not been complied with."

On 30 January, the judge issued orders requiring the Appellants to file and serve the defences and sworn statements within 7 days. A defence and counter-claim were filed on 17 February 2006. There were no sworn statements filed in support of the defence and counter-claim.

On 20 February 2006, the trial judge issued further directions requiring the Respondent to file and serve a defence to the counter-claim within 14 days. The Respondent complied by filing a defence and counter-claim on 2 March 2006. The trial Judge issued further orders requiring the Appellants to file and serve their sworn statements in support of their defence and counter-claim. He adjourned the trial hearing date on 7 April 2006. On that date the parties agreed that the trial hearing be adjourned to 12 June 2006. On 12 June 2006, upon application by the Respondent, the trial judge struck out the defence and counter-claim of the Appellants.

The exercise of discretion under rule 6.8 of the Civil Procedure Rules must be done very sparingly. It is a discretion to be exercised only when it is clear that the non-appearing party does not intend to participate in the action. Sometimes that will be clear from the persistent ignoring of the Court’s orders, especially if there has been no one appearing at any directions hearing or conference.

Where a party has played some part in the proceeding, (as the Appellants had done by filing a defence and counterclaim), there is likely to be some other reason for their non-appearance. Generally, in such case, Rule 18.11 is the appropriate rule to follow if a party fails to comply with an order of the Court. On the above reasoning, the first ground of appeal is dismissed. The order struck out the defence and counter claim for failure to comply with the court’s orders, but this did not prevent the Appellant’s by leave from reviving their defence and from defending the claim.

On the second ground of appeal, it is submitted for the Appellants that the rules do not provide for an oral application for summary judgment. Summary judgment is dealt with under rule 9.6:

Summary judgment

9.6 (1) This rule applies where the defendant has filed a defence but the Claimant believes that the defence does not have any real prospect of defending the claimant’s claim.

(2) The claimant may apply to the court for a summary judgment.

(3) An application for judgment must:

(a) be in Form 15; and

(b) have with it a sworn statement that:

(i) the facts in the claimant’s claim are true, and

(ii) the claimant believes there is no defence to the claim, and

(4) The claimant must:

(a) file the application and statement; and

(b) get a hearing date from the court and ensure the date appears on the application; and

(c) serve a copy of the application and sworn statement on the defendant not less than 14 days before the hearing date.

(5) The defendant:

(a) may file a sworn statement setting out the reasons why he had an arguable defence; and

(b) must serve the statement on the claimant at least 7 days before the hearing date.

(6) The claimant may file another sworn statement and must serve it on the defendant at lease 2 days before the hearing date.

(7) If the court is satisfied that:

(a) the defendant has no real prospect of defending the claimant’s claim or part of the claim; and

(b) there is no need for a trial of the claim or part of the claim, the court may:

(c) give judgment for the claimant for the claim or part of the claim; and

(d) make any other orders the court thinks appropriate.

(8) If the court refuses to give summary judgment, it may order the defendant to give security for costs within the time stated in the order.

(9) The court must not give judgment against a defendant under this rule if it is satisfied that there is a dispute between the parties about a substantial question of fact, or a difficult question of law.

We agree with the Appellants that the judge was in error when he entered a summary judgment on 12 June 2006 against the Appellants on the liability issue without complying with Rules 9.6(3)(4)(5)(6)(7)(8)(g) and (10).

The second ground of appeal must be successful.

As to the third ground of appeal, we are also of the view that the Judge was in error for the following reasons:-

The Appellants did not take their chance to identify two other important problems with the proceedings. These problems are themselves sufficient reason to allow the appeal and to set aside the judgment of 19 October 2006.

The first problem is that the procedure available under Rule 3.12 of the Civil Procedure Rules for the Claimant to have started the proceedings as a representative action on behalf of six other persons was not properly used. The procedure was not appropriate in this matter. Although each of the seven claimants had much in common, they did not have the ‘same interest’ in the subject matter of the proceeding. They had parallel but different interests arising out of much the same facts. They each had a separate claim for losses, depending upon their particular circumstances. That is clear from the fact that Saksak J. looked at their individual facts and assessed their individual claims.

Each of the seven men should have been named as Claimants. Then the judgment should have been given in favour of the Claimants each of them individually for the separate damages assessed. That procedural flaw can be remedied when the case goes to a judge for further directions.

The problems which flow from that wrong use of Rule 3.12 are shown by the counter-claim which was struck out. It says the second Appellant was owed money by ‘the Claimant’, but it is not clear whether that means Tamata Mele only or one or more of the other men included in the claim. It also says ‘the Claimant’ had taken certain property of ‘the Defendant’. It does not say which of the seven men are alleged to have done that, or whether the property is of the First Appellant or of the Second Appellant.

The second problem is that the statement of claim does not clearly say whether it is against the first Appellant or the second Appellant. At some points it says the Appellants were both employers. At some points it says only the first Appellant was the employer. There is no suggestion they were joint employers. Counsel for the Respondents on the appeal said the first Appellant was the employer.

If the first Appellant is the employer, the second Appellant is not automatically liable for its debts except in some special circumstances. No such circumstances were alleged in the claim. The Judgment should not have been given against the Appellants jointly on the basis of the statement of the claim. It should be set aside also on that ground.

Those comments strengthen the need for parties and their lawyers to identify clearly which powers the Court is being asked to use when orders are sought, and to carefully consider the steps which need to be taken to make sure those powers are exercised in accordance with the relevant Act and the Civil Procedure Rules.

The Appellants are principally responsible for the present situation. Whether that is because of their own fault or that of their advisers, or a mix of those things, is up to them to sort out. They did not comply with the orders made on 30 January and 20 February 2006, and then after the default judgment they again did not file any statements. Nor did they attend the hearings on 12 June 2006 or 19 October 2006. On the other hand, the Respondent has complied with the orders of the Court and simply tried to enforce the claimed rights.

For those reasons, the Appellants should pay the costs of the appeal to be agreed or taxed. They should also pay the wasted costs of the hearings on 12 June 2006 and 19 October 2006, also to be agreed or taxed.

There was also a separate ground of appeal against the costs order that the Appellants to pay VT56,600 wasted by the adjournment of the hearing on 10 and 12 October 2006. There is no reason why that costs order should be disturbed. The Appellants appeared on those days by counsel, and asked for the adjournments because they were not ready to proceed. There is no basis for this Court to intervene with that order.

The orders on the appeal are

1. Appeal allowed, and orders made on 12 June 2006 and 19 October 1996 are set aside except for the order of 19 October 2006 that the Appellants pay the Respondent’s wasted costs of hearings on 10 and 12 October 2006 fixed at VT56,600.

2. The matter is remitted to the Supreme Court for rehearing.

3. The Appellants pay to the Respondent costs of the appeal and the wasted costs of the judgments on 12 June 2006 and 19 October 2006.

DATED at LUGANVILLE this 4th day of April 2007.

BY THE COURT

Hon. Vincent LUNABEK, Chief Justice
Hon. J. Bruce ROBERTSON
Hon. J. Hamlison BULU
Hon. J. Christopher TUOHY
Hon. J. John MANSFIELD