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United Apparel (MFG) Ltd v Saville Heaton & Company Ltd [1996] FJCA 6; Abu0016.96s (1 November 1996)

IN THE FIJI COURT OF APPEAL
AT SUVA
CIVIL JURISDICTION

CIVIL APPEAL NO. ABU0016 OF 1996

BETWEEN:

UNITED APPAREL (MFG) LIMITED
a limited liability company having its registered office
at 86 Rodwell Road, Suva
Appellant

AND:

SAVILLE HEATON & COMPANY LIMITED
a limited liability company having its registered office
at Heaton House, Bredford Road, Dewsbury, West Yorkshire England
Respondent

H.K. Nagin for the Appellant
J. Howard for the Respondent

Dates of Hearing: 25th and 29th October 1996
Date of Decision: 1st November 1996

DECISION
(Application in Chambers for a Stay Order)

This is an application for stay pending appeal from two judgments given by His Lordship Mr. Justice Scott on the 9th of April 1996 and 30th July 1996. The first judgment was His Lordship's judgment in the trial of this action whereby he gave judgment for the Respondent (Plaintiff) in the Fiji dollar equivalent at the exchange rate prevailing on 1st July 1991 of £27,711.74 together with interest in the round average amount of 10% from the date of the commencement of the proceedings until the date of judgment together with costs to be taxed if not agreed.

The second judgment of His Lordship concerns an application by the Respondent (Plaintiff) that the costs which he awarded on the 9th of April be taxed on an indemnity basis. The judge rejected that application but directed the Chief Registrar when taxing the bill to do so in such a way that the Respondent recovers all costs reasonably incurred by it.

By its Amended Notice of Appeal dated 9th September 1996 the Appellant gives eight grounds the last of which relates to the trial judge's decision on costs. No argument was addressed to me on this latter ground on the hearing of the application for stay so I do not refer to it again.

The action in the High Court concerned a claim by the Respondent (Plaintiff) that the Appellant (Defendant) had falsely represented that clothing manufactured by it in Fiji would enter the United Kingdom duty free and that the Respondent was thereby induced to enter into a contract with the Appellant for the supply of such clothing.

In the event, the clothing was in fact dutiable and duty was in due course levied by H.M. Customs in the United Kingdom in the sum of £27,711.74 which was paid by the Respondent.

The Plaintiff's claim was put in the alternative that it was a term of the Contract entered into between the parties that the clothes would be imported into the United Kingdom from Fiji duty free but that in breach of the contract duty was in fact payable.

The learned trial Judge rejected the alternative claim but found for the Respondent (Plaintiff) in Tort, presumably on the principle of Hedley Byrne & Co. v. Heller & Partners [1963] UKHL 4; (1964) A.C. 465.

Two affidavits have been filed on behalf of the Appellant in support of its application for stay of the judgment and one on behalf of the Respondent. I do not propose to canvass the various grounds of appeal except to say that I do not consider the appeal is one that is "obviously destined to fail or obviously merely for purposes of delay". See Sewing Machines Rentals v. Wilson (1975) 3 ALL E.R. 553 at 555 B.

Likewise I do not propose to discuss at any length the grounds on which stays of execution are granted, the law on this being well settled and referred to in many decided cases. The principle which stands out above all others in these cases is that the Court has an absolute and unfettered discretion as to the granting or refusing a stay, and as to the terms on which it will be granted - A-G v. Emerson [1889] UKLawRpKQB 190; (1889) 24 Q.B.D. 56, C.A. mentioned in Halsbury's 3rd Edition Vol. 16 para 61.

In Reddy's Enterprises Limited v. The Governor of the Reserve Bank of Fiji Fiji Court of Appeal Civil Appeal No. 67 of 1990 Sir Moti Tikaram P. rejected a suggestion that in all applications for a stay it is incumbent on the Appellant to show special circumstances in the traditional sense. His Lordship stated at page 20 of his decision on an application for stay by the Appellant that adherence to an inflexible test to all types of stay or injunction cases without considering their nature is not to be favoured. He said, and with respect I agree, that the strict test rule could negate the wide discretion vested in Courts and could even lead to denial of justice in particular cases.

The normal rule is that a successful party is not to be denied the fruits of his judgment and in the present case Scott J. rejected an application for stay on the 15th of July 1996 on the grounds, according to counsel, that the Chairman of the Respondent Company did not appear to be the type of man who would not refund the amount of the judgment if the Respondent lost the appeal. With respect I would say that it seems to me there is a more substantial ground for refusing a stay here, namely that I am not satisfied on the evidence that the Respondent would not be financially capable of returning the judgment money paid to it if the appeal is successful.

Much is made of this in both Mr. Nagin's argument for granting of stay and in the affidavit by the Managing Director of the Appellant Company Ramesh Solanki sworn on the 9th of September 1996.

Mr. Solanki claims that the Respondent is a relatively small company based in the United Kingdom and that it had difficulty in paying the Customs duty immediately and was obliged to pay it over a period of two years to the United Kingdom authorities.

It seems to me that the answer to that allegation lies in paragraph 12 of the affidavit by F. David Heaton the Chairman of the Respondent sworn on the 11th of October 1996 when he says that the Respondent has 160 full time staff and has been in existence for 47 years.

Gross turnover averages £7,000,000.00 annually, which at the Fiji exchange rate of 0.45 equates to F$15,555,555.00 annually.

Mr. Heaton also states that his company is presently spending in excess of £2,000,000.00 per year with its overseas suppliers, mainly from Eastern Europe and the Far East. He says the company exports about 20% of its product. I therefore reject this argument and its associated argument that because of the alleged financial instability of the Respondent the Appellant's appeal will be rendered nugatory if a stay is refused.

The highest at which counsel for the Appellant could put this argument was that the judgment money "may not be recovered" if payment is made to the Respondent. The answer to that argument is simply that the correct test is whether there will be any reasonable probability of recovering the money and I am not satisfied that in this case there would be no such reasonable probability.

It is true, as Mr. Nagin argued, that the Respondent is not in the jurisdiction but there is reciprocity of enforcement of judgments between United Kingdom and Fiji. Furthermore the fact that the Respondent is a foreign company is not a special circumstance for granting a stay. Here it is clear the Respondent has an established place of business in the United Kingdom and is easily locatable.

It is submitted by the Appellant that it has strong grounds for an appeal but as Lord Esher M.R. said in Atkins v. Great Western Railway Co. (1885-86) 2 TLR 400, no one ought to appeal without strong grounds for doing so. In any event senior counsel for the Respondent has also apparently advised that the Respondent has good grounds for holding its judgment.

During the course of argument Mr. Howard for the Respondent stated that it is not likely this appeal will be heard before August 1997 or even November whereas Mr. Nagin stated that it might be possible to have the appeal heard in next February or at the latest in May 1997.

I have spoken to the Senior Court Officer of the Court of Appeal on this and he has told me that the appeal could be heard in the second half of February 1997 or at the latest next May. Had the Senior Court Officer confirmed Mr. Howard's view that the appeal could not be heard until August or November next I would have had no hesitation in rejecting the application for stay.

However in view of his advice that it can be heard in the second half of February I now direct that this appeal be heard in the second half of February 1997 and that a stay be granted to the Appellant on condition that the appeal is heard next February.

If it is not, and the onus is on the Appellant to ensure that it is heard then, I will consider favourably any application by the Respondent for the amount of judgment be paid to it immediately.

JOHN E. BYRNE
JUDGE

Abu0016.96s