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Fujitsu (NZ) Ltd v International Business Solutions Ltd [1998] VUSC 26; Civil Case 121 of 1997 (2 July 1998)

IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU

CIVIL JURISDICTION

Civil Case No. 121 of 1997

BETW>BETWEEN:

FUJITSU (NZ) LTD
Plaintiff

AND:

INTERNATIONAL BUSINESS SOLUTIONS LTD
First Defendant

t

AND:

GREATER PACIFIC COMPUTERS LTD
Second Defendant

AND:

JAN MARK POZDENA
Third Defendant

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&nb">

Cor">Coram: Justice Oliver A. Saksak sitting in Chambers

Counsel: Mr. Robegden unsel for the Plaintiff
&nbs;  p;&nssp ; &nb.p;Mr. Silas Clas C. Hakwa of Counsel for the Defendants

Date of Hearing: 9th July, 1998

ALIGNTER"RLOCUTORY JUDGMENT

IFY">NaturNature and Background of Case

This is an Application made by Summons dated 6th July 1998 and filed by Counsel for the Defendants under the provisions of Orders 14,15, 55, 57 and 65 of the High Court (Civil Procedure) Rules 1964. The Defendants seek the following Orders –

  1. Leave to apply for an Order to stay the execution of the Orders made by this Honourable Court on or about 2 July 1998. (the Orders)
  2. An Order to stay the execution of the Orders
  3. An Order to set aside the Orders
  4. An Order for security for costs
  5. Costs of and incidental to this action
  6. Such other or further Orders as the Court deems fit.

On 2 July 1998 it was adjudged and ordered by this Honourable Court as follows:-

(1) That the judgment for the the Plaintiff in the sum of US$175,982.74.

(2) That the Defendants deliver up to the Plaintiff’s Solicitors forthwith, the Computer Software package known as World Banker Software, retaining no part or copies of it in its possession.

(3) That the Defendants permit the Plaintiff or its agents to inspect the Defendant’s premises and records to ensure that no part or copy of World Banker Software has been retained by any of them.

(4) the n continuesinues as toas to the balance of the claim against the defendants.

(5) The Deftsdan Pihe Piff&# f&# costs of and incidental to this this Appl Applicatiication and of the Action to the time of the Order, such costs to bed ifagree>

Thes>These are the Orders, which the Defendants seek to have set aside by the Court. They were granted at a time when Counsel for the Defendants did not appear for the Hearing of the Plaintiff’s Summons issued pursuant to Order 14 Rules 1 & 4 of the High Court Rules. By that summons the Plaintiff sought for Orders, inter alia, that –

(a) There dgment for the PlainPlaintiff against the Defendants in the sum of USD250,166.92.

(b) In the alternative, that there be jud for laintn the sum of USD130,293.45.

(c) In the further alternative that there be judgment for the Plaintiff against the Defendants in the sum of USD95,000.00.

The history of the matter goes further to show as follows:-

  1. On or about 22 August 1997, the Plaintiff filed a statement of claim against the Defendants for the balance of the principal sum of USD 160,000.00 together with accrued interests pursuant to a Loan Agreement.
  2. On or about 1st September 1997, the Defendants filed Memorandum of Appearance.
  3. On or about 16th September 1997, the Plaintiff delivered an Amended Statement Claim.
  4. On 22nd October 1997 the Defendants filed and delivered statements of Defense And Counter-claims.

  5. On or about 11th November 1997, the Plaintiff delivered their reply any defense to counter-claims

It is against the above background information that the Defendants seek for orders setting aside the Orders of this Honourable Court dated 2 July, 1998.

Evidence

The Defendants relied on affidavit evidence of Mr. Hakwa of Counsel and that of Mr. Pozdena dated 5th July 1998 respectively in support of their application.

The Plaintiff relies on the affidavit evidence of Mr. Steven Brown dated 13th October 1997, that of Mr. David Hudson dated 27th November 1997, that of Lewia Dick dated 7th July, 1998 and that of Mr. Robert Sugden of Counsel dated 8th July, 1998.

Preliminary Issues

I deal first with some preliminary issues in relation to the Orders sought by the Defendants in the Order as per the Summons in the following manner:-

  1. Whether or not leave is necessary to enable the Defendants to apply to stay the execution of the Orders of this Court dated 2nd July, 1998?

    2. The Plaintiff did not oppose the Defendants’ application for leave and that to me implies that this is not in issue.

    The Defendants summons is based on the provisions or Orders 14, 15, 55, 57 and 65 of the Rules of the High Court 1964. I have examined the provisions of these Orders and I see nothing in it that requires an application for leave to apply to stay the execution of existing Court Orders. Parties are at liberty to apply but they do not have to seek leave prior to applying. In the circumstances therefore, it is not necessary for this Court to grant leave and no Orders will be made to that effect.

  2. Whether or not the execution of the Order of 2nd July 1998 should be stayed pending further Orders of this Court?

    3. Again it seems to me that Counsel for the Plaintiff did not object to the application. Indeed, Mr. Sugden at the end of all submissions and responses did provide an oral undertaking that the Orders would not be executed until the court delivers its decision on the Defendants’ application. Under those circumstances therefore it is not necessary for the Court to grant the Order sought.

  3. Whether or not this Court should set aside the Orders of 2nd July, 1998?

Both Counsel advanced lengthy arguments and submissions in relation to this issue. I propose to deal with the arguments and submissions in the following manner:-

(1) Summary of Defendants Arguments and Submissions.

The Defendants through Mr. Hakwa of Counsel, say that the Orders of 2nd July 1998 should be set aside for the following reasons:-

(a) The Defendants were not available in Court to oppose the application for summary judgment because counsel was not aware of the hearing.

(b) In view of the Defendants’ defense and counterclaims filed and delivered on 22nd October 1997 respectively, in which the Plaintiff’s claims are heavily and vigorously contested, there was no need for a summary judgment. Counsel submitted that the proper procedure should be followed. He submitted that the application for summary judgment was premature in that it was filed only one month after the Defendants’ Defense and Counterclaims were filed and delivered. Counsel argued that he did not receive a summons with a Return Date on it.

(c) The Defendants did not know where US$175,982.74 came from as the amounts claimed in the summons are different. Counsel submitted that there was no evidence to support the grant of the Orders. He argued that as the affidavit of Steven Brown was deposed to before the Defendants’ Defenses and Counterclaims, no references were made to those defenses and counterclaims.

He submitted that the affidavit of Mr. Brown was inadmissible and could not be relied upon by the Plaintiff as evidence to support their application for summary judgment. He argued that Mr. Hudson’s affidavit was defective in that Mr. Hudson was a Partner with Fujitsu and as such he was not authorized to make sworn statements in his belief on behalf of the Plaintiff. Counsel submitted that only an authorized representative has the power to make affidavits deposing to information held in his knowledge or belief on behalf of a company.

(d) Counsel for the Defendants argued that the Plaintiff had abused the process by obtaining summary judgment when the substantive case contains complex issued which they strongly and vigorously contest.

(e) Counsel for the Defendants argued that part of the Orders were of a prerogative nature for which leave was first required. He submitted that there was no leave sought by the Plaintiff prior to proceeding the way they did.

(f) el for the Defendants argu argued that the summons was not actually filed in the Court Registry.

(g) Counsel argued that the Defendants are prejudiced by the Orders which take away their rights and reasonable expectation to have access to a proper trial for their counter-claims.

(h) Finally Mr. Hakwa argued that as the Plaintiff Company is resident out of the jurisdiction with no known assets that the Plaintiff be ordered to provide security for costs.

(ii) Plaintiff's Responses and Submissions

In response Mr. Sugden of Counsel for the Plaintiff told the Court as follows:-

    1. As regards Mr. Hakwa not being available in Court on the hearing of the Application for summary judgment, Mr. Sugden referred to the Affidavit Of Service sworn and filed by Mrs. Leiwia Leikarie Dick. She deposed to serving two affidavits and a summons (Annexure "A") on the offices of Messrs. Silas C. Hakwa & Associates on 21st April 1998 at 14.00 hours.

      2. Receipt thereof was acknowledged by one Selyn on 21st April 1998 at 14.00 hours as seen as from Annexure "B". The summons was lodged at the Registry for filing on 27th November ,1997 as seen from Annexure B at page 2. The summons was dated 27th November 1997 but was not actually filed until 14th April 1998. With these Mr. Sugden argued that there was no reasonable excuse why Counsel for the Defendant could not be available in Court on 2nd July 1998.

    2. As regards the Defendants’ defences and counter-claims, Mr. Sugden argued that it was not sufficient that a defense was shown. Defendants have to show that their defense is a good and reasonable defense. He referred the Court to Order 14 Rule 1 and Order 21 Rule 20 of the High Court Rules 1964.
    3. As regards the sum of US$ 175,982.74 obtained in the summary Judgment Mr. Sugden argued that there was no ambiguity about it. It was the balance of the sum of US$ 160.000.000 as principal loan, plus interest accrued at 7.5 % per annum from 1st July 1993 as shown in paragraph 10 of the Statement of Claim.
    4. As regards the allegation of an abuse of process, Mr. Sugden argued that Summary Judgment was obtained in accordance with the provisions of Order 14 Rule1 of the High Court Rules 1964. All documents required by that provisions were filed and the defences not being good and reasonable defences could not prevent the Plaintiff obtaining Judgment.
    5. As regards whether or not leave had first to be sought, Mr. Sugden argued that there was no claim for a prerogative writ therefore no leave was required. He submitted this issue had no bearing on the issue of whether or not judgment should be set aside.
    6. As regards the issue of the summons not being filed in the Court Registry, Mr. Sugden relied on Annexure B of Mrs. Dick’s affidavit sworn and filed on 8th July 1998.
    7. As regards Mr. Hakwa’s argument that the Defendants have been denied their rights and reasonable expectation for access to a proper trial of their counter-claims, Mr. Sugden submitted that as the Defendant have admitted to the amount claimed in paragraphs 6, 7, 8 and 9 of the statement of claim, it was proper that the Plaintiff claim Judgment.
    8. As regards application for security for costs, Mr. Sugden told the court that the Defendants have not asked for it earlier. He told the Court that in about May 1997 the Plaintiff had indicated to the Defendants that they would be willing to put up security for costs but they have not been asked. He argued that this is a matter that should have been asked for promptly and such application should be accompanied by a skeleton bill of costs. He cited the case of Auckland Heath Care Services Ltd. –V- Daniel Joli and others, Civil case No. 101 of 1995 and submitted that having failed to submit a skeleton bill of costs, the Defendants should not be allowed security for costs.

The Issues.

  1. Whether or not the summary judgment of the Court dated 2 July, 1998 should be set aside ?

For the Court to decide the issue, the Court has to look back at the Plaintiff’s Application. The Application was made by way of a summons dated 27th November 1997 but which was actually filed on 14 April, 1998 and made returnable on 2nd July, 1998 at 9 o’clock in the morning. The summons was issued pursuant to Order 14 Rule1 and 4 of the High Court Rules 1964. This is the summons that Mr. Hakwa says in his affidavit and which is exhibited as Annexure 5 that did not have a returnable date. It was dated 27th November 1997 and it did not bear the Court Stamp to show that it was filed. How did that come about ?

I accept that on 27th November 1997 the summons plus two affidavits were lodged at the Court Registry as shown by the delivery book. (Annex B of Mrs. Dick’s affidavit). When the recipient took custody of the documents, she only acknowledged receipt by placing her signature. She did nothing with them. In the delivery book (Annexure B) it reads in part – "27.11.97 A. S/CT – 1+3 FUJITSU SMNS CC 121/97 FOR FILING"

The Summons was not filed until 14th April 1998. Two other documents were lodged on 27th November 1997 together with the summons. These were the affidavit of David Hudson sworn and dated 27 November 1997 and the affidavit of Steven Brown sworn and dated 13th November 1997. The Court Stamp at the back of those documents show that they were filed on 28th November, 1997. There is no evidence of when these documents were received back at the offices of Messrs. Hudson & Co. This Court can assume safely that in the absence of evidence these two documents were received back by Hudson & Co. without the summons. This is so because on 10th March 1998 when the Plaintiff’s Solicitors wrote to the Defendant’s Solicitors they said this at paragraph 2:-

" We now enclose a copy of the Summons to which the form relates together with copies of the 2 Affidavits filed in support"

I have said above that the actual summons was filed on 14th April, 1998 because it bears the Court stamp indicating that date. That being so, the only inference the Court can draw is that the copy of the summons accompanying the two affidavits was not a filed copy. And further that it had no returnable date on it to put Counsel on Notice as to the date of hearing of the Application. These Documents were received at the offices of Messrs. Silas Charles Hakwa & Associates on 11th March 1998.(see Annexure 4 – Hakwa Affidavit) This does not fall in line with the evidence of Mrs. Dick. She says at paragraph 2 of her affidavit that on 21st April, 1998 at 14.00 hours, she served two affidavits and a summons on one Selyn at the offices of Messrs. Silas Hakwa & Associates. Her delivery book (Annexure B) shows this is so and I accept that. But I do not accept her evidence that she served the summons (filed copy) with the two affidavits. Her delivery book says -

" 21.4.98.

4. M/SS. Hakwa – FUJITSU L/O 21/4/98 + Summons

BY WAY OF SERVICE CC 121/97"

There is another reason for so finding. The affidavit of Steven Brown is bulky, indeed it is bounded as a book in itself and it is therefore not likely that a second copy would have been served if the first was served on 11th March 1998.

The end result of all this is that I am satisfied that Messrs. Silas Hakwa and Associates were served with the filed summons with a returnable date. It is only unfortunate that the Summons was not brought to the attention of Mr. Hakwa in time or at all. But if Mr. Hakwa was put on notice would be he have come to Court on 2 July 1998 ? Mr. Hakwa tells the Court in his affidavit at paragraph 13 that he was attending Parliament that day. Is this a good and reasonable excuse why the summary judgment in favor of the Plaintiff should be set aside?

Without delving too much into the reasons I say that it is. Mr. Hakwa is both a Member of Parliament and a Minister of the State. His duties, functions and responsibilities are such that his duty to the State must prevail over all other commitments even when through unfortunate circumstances he was not aware of the Hearing on 2nd July, 1998.

He has now come to the Court to ask that the Court set aside its judgment made in favor of the Plaintiff for reasons, among others, that he was committed to State duties and matters at the time. That is a good and reasonable excuse to me and I so rule.

On grant of the Orders on 2nd July 1998, I was satisfied that the Plaintiff had complied with all the requirements of Order 14 Rule 1 of the High Court Rules 1964 except one which the Court was not addressed on. Those requirements are discussed in Civil Case No.124 of 1996, Andree Marie Frouin – V - Giles H.J. Daniel at pp.4 and 5. That Case is similar to this case except that the Defendant did not have a counter-claim as the Defendants here have. I held that the Defendant had a good defense and I refused to order for summary judgment against the Defendant.

One of the issues which the Court did not consider in Frouin’s Case is whether or not the Plaintiff’s right to invoke Order 14 to obtain summary judgment is an absolute right. This issue was not addressed by Counsel at the time. In the present case Mr. Hakwa has raised the issue by arguing that the Plaintiff had not sought leave prior to making his application for summary judgment. This is a legitimate argument, which the Court accepts. The Plaintiff’s right to obtain summary judgment is not absolute. He first has to seek leave of the Court to apply and I so rule. In the present case the Plaintiff did not seek leave to apply for summary judgment on 2 July, 1998.

One other case in which a similar application was made was Civil Case No.110 of 1997, VCMB -v- Carmille (Vanuatu) Ltd. The summons taken out there was issued under Order 57 Rules 1 and 14. The Plaintiff sought summary judgment for the following moneys –

    1. A deposit of US $100,000.00 to be retained by them.
    2. VT 15,181,736 to be paid by the Defendant to the Plaintiff for undelivered copra.
    3. VT 78,939,219 less the vatu equivalent of US$100,000.00
    4. Action to continue as to the balance of claim.
    5. Costs of the application.

I dismissed the application by Order dated 28th October 1997 simply because Summary Judgment cannot be claimed under Order 57 Rules 1 and 14.

The two cases referred to and the present case involve huge sums of money. In the first two cases there were defences. There may have been some admissions but those admissions were qualified. Here there are not only defences, but also counter-claims. There have been admissions but they are qualified admissions, in other words, the Defendants are saying :- "Yes, but the Plaintiff has not done this or that.".

Here Mr. Hudson and Mr. Brown say in their respective affidavits that the Defendants have in their respective beliefs no defences to the Plaintiff’s claims. This cannot be correct. If the Defendants did not file any defences at all, it would be correct to say that they have no Defense but where they have filed defences, it would be more appropriate to say "I verily believe that the Defendants have no good defence." This would convey the truth in the circumstances.

(2) Whether or not the Defendants have a defense, and if so, is it a good defense ?

All three Defendants filed defences and counter-claims and/or set-off on 22nd October, 1997. The Plaintiff’s reply and defense to the counter-claim is dated 11th November, 1997. The Plaintiff has made some denials to some allegations in the counter-claims. On the other hand the Defendants have made some admissions, which I say are qualified

admissions in relation to their counter-claims. Without their counter-claims, their defences would not be good defences. But having made qualified admissions based on their counter-claims some of which, if not all, have been denied by the Plaintiff, I agree with Mr. Hakwa that it is most appropriate to proceed through the usual and normal procedures to allow the defendants to have a proper trial of their counter-claims.

For the Plaintiff to proceed under Order 14 having knowledge of all the Defendant’s defences and counter-claims is to me taking a short cut. This has been done on two occasions in the cases referred to which fortunately the court has refused. Mr. Hakwa has argued that the Plaintiff having proceeded in the way they did have abused the process. I am inclined to agree with Mr. Hakwa. For these reasons therefore I say the Defendants have good defences and I so rule.

(3) Whether or not the Plaintiff should provide security for costs?

Finally I consider the issue of security for costs sought by the Defendants. This Application is made under Order 65 Rules 4, 5 and 6. This is a matter purely for the discretion of the Court. If it were not for the Defendant’s counter-claims and/or set-offs I would agree that this is a matter which the Plaintiff should be ordered to provide security for costs. What in effect is placed on the Plaintiff by the Defendants’ counter-claims especially when they have denied those allegations is that they are obliged to defend themselves in the normal process. And this will involve costs, which the Plaintiff inevitably has to meet. Both parties have therefore put themselves in a position where it is inevitable for either to escape meeting costs. For these reasons it is not necessary for the Plaintiff to be required to pay security for costs. This part of the Defendants’ Application is accordingly dismissed.

For the above reasons, IT IS ORDERED THAT :-

  1. The Orders of this Honourable Court dated 2nd July, 1998 are hereby vacated.
  2. The Application by the Defendants for security for costs is dismissed.
  3. Both Parties be at liberty to apply for further Directions.
  4. There be no Order as to costs.

DATED AT PORT VILA THIS 2nd DAY OF JULY 1998

BY THE COURT

OLIVER A SAKSAK
JUDGE

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