| Fiji Islands - Powell v ANZ Banking Group Ltd - Pacific Law Materials |
IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
CIVIL ACTION NO. 425 OF 1998
:
1. ALFRED POWELL
2. LUTE POWELL
Plaintiffs
AND:
1. ANZ BANKING GROUP LIMITED
2. REGISTRAR OF TITLES
Defendants
Mr. S. Lateef for the first Defendant
DECISION
On 31 August 1998 on an ex parte moby the plaintiffs an interim injunction was granted by this this Court returnable for 17 September
1998.
Affidavit in Reply to plaintiffs' motion was filed by the first defendant (D1) on 25 September and hearing inter partes took place
on 2 October when the defendant asked for dissolution of the injunction.
Plaintiffs' submission
The learned counsel for the Plaintiffs referred to the affidavit of the first Plaintiff filed in support of the motion. Therein the
plaintiffs admitted that they owe the defendant a certain sum of money and are unable to pay the debt and that is why the power of
sale under the mortgage was exercised by the defendant. The first plaintiff in his affidavit says that "in the next three months
we would be able to pay our total debt to the first defendant".
Mr. Samusamuvodre admits that he knows that prior to interim injunction having been granted the defendant had already accepted a tender
for the sale of the property in question and had entered into a sale and purchase agreement with a purchaser.
Mr. Samusamuvodre submits that it is the duty of the mortgagor to obtain the "best price", that is, the market value of
the property. He complains that the conduct of the Bank Manager was 'unreasonable' as a result the plaintiffs will lose their property.
He says that in these circumstances the Court has jurisdiction to grant an injunction.
Counsel further told the Court that although the first plaintiff runs a business the moneys running into about half a million dollars
according to the affidavit is not to hand yet and counsel is unable to say if any money is actually available. He submitted that
he would ask that the interim injunction continue and that the plaintiffs be given one month within which to deposit into Court the
amount owing to the defendant.
In his written submission Mr. Samusamuvodre dealt with a number of issues such as (a) that there was a duty on the mortgagee that
it should 'act in good faith without fraud and without wilfully or recklessly sacrificing the interest of the mortgagor'; and (b)
some allegation of husband and wife transaction where security could be "invalidated against the creditor if reliance is placed
against the husband if she had no ground for believing she comprehended the transaction and freely entered into it". Then he
dealt with the matter of interim injunction and referred to Court of Appeal case of ANTECH INTERNATIONAL LIMITED and HARISH MAHENDRA SINGH v WESTPAC BANKING CORPORATION (Civ. App. No. 29/96s) where interim injunction was granted subject to payment into Court.
Finally, the learned Counsel submits that following ANTECH (supra) "a condition be placed on the interim injunction currently
in place, that the Plaintiffs be given the maximum of 30 days from the date of judgment to pay into Court, $90,353.14" and not
$140,567.98 and "non-compliance by the Plaintiffs, would render the rights to seal the Order granting interim Injunction lapse,
and the application dismissed".
Defendant's submission
Mr. Lateef submits that it is too late in the day to make this application as the Plaintiffs had plenty of time after the Notice was
given by the defendant. The defendant Bank had already entered into a sale and purchase agreement and it is impossible for it to
get out of it.
Mr. Lateef submits that the property has not been sold at an undervalue as tenders were properly called after advertisement. He says
that if money is to be paid then it should be paid directly to the defendant as it is owed to it. He further says that in this case
damages is adequate remedy for the Plaintiffs. The Plaintiffs have not made any offer to pay to the Bank even after indicating that
the first Plaintiff will be receiving a substantial amount from his business in September.
It is the Defendant's (D1's) argument that it has acted bona fide throughout in the course of carrying out its powers of sale against
the Plaintiffs. It has a legally registered mortgage against C.T. No. 5225.
Mr. Lateef for D1 referred the Court to a number of authorities which shows that on the facts of this case the injunction should not
remain.
The learned Counsel submits that the tenders for the property were properly dealt with. The D1 is a substantial Bank and is able to
meet any damages that may be awarded against it in the substantive action. He submitted that damages being an adequate remedy there
is no reason for injunction to continue.
He submits that the application for injunction was made subsequent to two 'mortgagee sale' advertisements and after tenders were received.
Consideration of the issue
This is a case where I find that the Bank, which is the Mortgagee, is only exercising its rights under the mortgage. There is no doubt
that the Plaintiffs are substantially in arrears and have not been able to meet their commitments despite opportunity having been
given them to do so. It appears that they are in no position to pay and there is no satisfactory evidence that they are likely to
have a windfall from sale of yagona. The assertion in the affidavit that the first Plaintiff will be receiving about half a million
dollars from yaqona sale in September has not materialised. It seems that the Plaintiff is merely building a castle in the sky.
The submission by Mr. Samusamuvodre about the sale of the property at a low price and not the best price and the allegation that the
second Plaintiff who is the wife of the first Plaintiff did not know what document she executed etc. have no relevance to this matter
for the purpose of the application to dissolve the interim injunction.
The law pertaining to interim injunction is laid down by the House of Lords in AMERICAN CYANAMID CO v ETHICON LTD [1975] UKHL 1; (1975) A.C. 396. Injunctions are an equitable remedy and are within the Court's discretion. Injunction will be refused if the Plaintiff can be fully
compensated by an award of damages. In LONDON & BLACKWELL RAILWAY CO v CROSS [1886] UKLawRpCh 7; (1886) 31 Ch.D. 354 at 369 LINDLEY L.J. said: "The very first principles of injunction law is that prima facie you do not obtain injunction to restrain actionable wrong for
which damages are the proper remedy".
In considering this application I have borne in mind the principles governing the "balance of convenience" as stated by
LORD DIPLOCK in the CYANAMID case (supra) where at p.510 he said:
"My Lords, when an application for an interlocutory injunction to restrain a defendant from doing acts alleged to be in violation
of the plaintiff's legal right is made on contested facts, the decision whether or not to grant an interlocutory injunction has to
be taken at a time when ex hypothesis the existence of the right or the violation of it, or both, is uncertain and will remain uncertain
until final judgment is given in the action. It was to mitigate the risk of injustice to the plaintiff during the period before that
uncertainty could be resolved that the practice arose of granting him relief by way of interlocutory injunction; but since the middle
of the 19th century this has been made subject to his undertaking to pay damages to the defendant for any loss sustained by reason
of the injunction if it should be held at the trial that the plaintiff had not been entitled to restrain the defendant from doing
what he was threatening to do".
He goes on to say:
"The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he
could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial;
but the plaintiff's need for such protection must be weighed against the corresponding need of the defendant to be protected against
injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated
under the plaintiff's undertaking in damages if the uncertainty were resolved in the defendant's favour at the trial. The court must
weigh one need against another and determine where the balance of convenience lies."
I adopt the following words of LORD DENNING in HUBBARD v VOSPER (1972) 1 All E.R. 1023 at 1029:
".....In considering whether to grant an interlocutory injunction, the right course for a judge is to look at the whole case.
He must have regard not only to the strength of the claim but also to the strength of the defence, and then decide what is best to
be done."
Looking at the whole case, the question is, "where does the balance of convenience lie?" Sir Robert in CAYNE v GLOBAL NATURAL RESOURCES plc (1984) 1 All E.R. 225 at 237 describes the process thus: "the balance of the risk of doing an injustice better describes the process involved".
Similarly, in FRANCOME v MIRROR GROUP NEWSPAPERS (1984) 1 W.L.R. 892 at 898E DONALDSON M.R. succinctly expressed the views which are apt here and fit to be applied to the facts and circumstances of this case. He said:
"I stress once again, that we are not at this stage concerned to determine the final rights of the parties. Our duty is to make
such orders, if any, as are appropriate pending the trial of the action. It is sometimes said that this involves a weighing of the
balance of convenience. This is unfortunate expression. Our business is justice, not convenience. We can and must disregard fanciful
claims by either party. Subject to that, we must contemplate the possibility that either party may succeed and must do our best to
ensure that nothing occurs pending the trial which will prejudice his rights. Since the parties are usually asserting wholly inconsistent
claims, this is difficult, but we have to do our best. In so doing we are seeking a balance of justice, not convenience."
As I said before, applying the above principles, this is most certainly not a case where as here the mortgagee which is properly exercising
its right of sale have the interim injunction continue and where the Plaintiffs could be properly compensated for in damages. I would
apply the principles set out in CYANAMID (supra) in regard to the grant or refusal of interlocutory injunction and refer to LORD DIPLOCK'S judgment at p.407 where it is stated:
"The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question
to be tried. It is no part of the court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavit
as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed
argument and mature considerations. These are matters to be dealt with at the trial".
It has been told, in the absence of wholly exceptional circumstances and in the absence of an offer to pay the whole amount into Court
injunctive relief may not be granted (DEO NARAYAN V RAM RAJ HBJ 77/94S). This principle was confirmed by SCOTT J. in JOE COLATI v FIJI DEVELOPMENT BANK (HBC No. 60/98).
Counsel knows what the Court's stand is on these matters. He himself has referred to ANTECH wherein the full amount was required to be deposited.
Conclusion
After analysing the affidavit evidence before me and the submission of both Counsel and applying the principles stated by LORD DIPLOCK, I am of the view that damages is an adequate remedy in this case. I do not find that there are any serious questions to be tried
in so far as the granting of injunction is concerned.
On the facts and circumstances of this case, it is not a proper case for the grant and for the continuation of the interlocutory injunction
or to maintain the status quo until the trial of the action. The grounds are not strong enough to prevent the exercise by the defendant
(ANZ) of its powers under the security documents and hence no heed could be given to the arguments put forward by the Plaintiffs
for the purposes of this application. It will open the floodgates if I were to accede to the continuance of the injunction in cases
of this nature involving mortgagees. The Plaintiffs overlook the terms and the covenants to which they found themselves engaged when
they executed the security documents.
However, having considered the law on the subject and the submissions made by counsel, particularly the offer by plaintiffs to pay
moneys into Court, belated though it is, it is ordered that the interim injunction be conditionally dissolved upon the plaintiffs
paying into Court the sum demanded, namely $140,567.98 within 14 days from today, whereupon the defendant will be restrained from
exercising its power of sale until the hearing and determination of the action. Failure to comply with this order will mean that
the defendant will be at liberty to proceed with its powers under the mortgage from where it stopped prior to the said interim injunction
being granted. It is directed that if the said sum is deposited into Court the Chief Registrar shall place the said sum on interest
bearing fixed term deposit with a Bank.
The plaintiffs are ordered to pay the costs of this hearing in the sum of $200.00 within 14 days.
D. Pathik
Judge
At Suva
20 November 1998
Hbc0425d.98s
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