| Fiji Islands - Rosenblatt v Wakaya Ltd - Pacific Law Materials |
IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
CIVIL CASE NO: HBC 189 OF 2000
BETWEEN:
BARRY LEE ROSENBLATT
& LINDA ANN ROSENBLATT
Plaintiffs
AND:
WAKAYA LIMITED
Defendant
Counsel: Mr C. Young for Plaintiffs
Mr W. Clarke for Defendant
Hearing: 26th April 2000
Decision: 3rd May 2000
DECISION
This is the Plaintiffs’ application to restrain the Defendant from disconnecting electricity supply to their home on the Wakaya Island.
The Plaintiffs are the proprietors of CT 26710 and 26711, property containing a house called “Lewadua.” The Defendant Company owns
the Wakaya Island Resort, which owns electricity supply on the Wakaya Island.
The Plaintiffs’ writ of summons states that from 1990 when “Lewadua” was built by the previous owner, Seni Establishment, electricity
was supplied to the house by the Defendant through cables running from the resort to the house. The laying of the cables was paid
for by Seni Establishment.
The Plaintiffs say that the understanding was that the electricity would continue to be supplied to the home, and that the supply
of electricity was one of the reasons that they bought the home.
The Plaintiffs bought the property in October 1996 from Seni Establishment. Between 1996 and 1998 the Plaintiffs and the Defendant
had a series of discussions and entered into some correspondence, about the possibility of “Lewadua” being available for private
renting by guests of the resort.
By January 2000, it became apparent that the Plaintiffs and the Defendant would not be able to reach an agreement about the rental
arrangements. On 9th February 2000 the Plaintiffs were informed by the Defendant, that electricity supply could no longer be supplied
to the house, and that the Plaintiffs should, within the next 75 days, build their own generator.
There was some correspondence between the parties about the building of the generator. It appears that the Defendant Company assisted
in obtaining quotations for the Plaintiff.
However, the Plaintiffs filed the writ of summons on 19th April 2000 and applied for this injunction. On the date of the hearing of
this injunction, the electricity supply had not been disconnected, although the seventy five day period had expired.
The Plaintiffs relied on the affidavit of Devanesh Sharma, annexing the affidavit of the first Plaintiff. The Defendant filed the
affidavits of Robert Miller and Dong Carlson, both employees of the Defendant Company.
The Plaintiffs claim that the Defendant is estopped by conduct from now disconnecting the electricity, or that the Defendant fraudulently
misrepresented to the Plaintiffs that electricity would be continuously supplied to “Lewadua”.
The Plaintiffs also claim that the Defendant is in breach of section 33(1) of the Fair Trading Decree, section 54 of the Fair Trading
Decree and of section 43(2) of the Fair Trading Decree.
The principles governing the grant or refusal of an interlocutory injunction are well-settled since American Cynamid -v- Ethicon.
The court must first consider whether there is a serious question to be tried. Secondly, the court must consider whether the plaintiff
could be adequately compensated in damages if the injunction were to be refused. If damages are not an adequate remedy, the balance
of convenience and justice of the situation must then be considered.
Counsel for the Plaintiffs submitted that even where the plaintiffs failed the tests in American Cynamid (supra) an injunction should still be granted where the Defendant had acted in clear breach of a legal duty, or in some way which
could be seen to be a deliberate or reckless disregard of the Plaintiff’s rights. He relied in particular on the decision of the
English Court of Appeal in Shelfer -v- City of London Electric Lighting Co. [1894] UKLawRpCh 212; (1895) 1 Ch 287 and the New Zealand Court of Appal decision in New Zealand Milk Corporation -v- McDonald (1993) 2 NZLR 543.
Counsel also referred to the court’s power to grant injunctions under the Fair Trading Decree to prevent breaches or continued breaches
of the Decree.
On a reading of the affidavit evidence before me, I am satisfied that the plaintiff has shown that there was a form of agreement or
licence between the parties as to the supply of electricity to “Lewadua”. Although the Sale and Purchase Agreement (to which the
Defendant was not a party) is silent on the supply of electricity, it is clear that since the construction of the house, and of cables
for electricity supply, that the Plaintiffs and the Defendant had an agreement that electricity would be supplied by the resort and
paid for by the proprietors of the house.
Although the Defendant Company did not make the representations contained in Annexure BLR1 to the affidavit of Barry Lee Rosenblatt,
it nevertheless continued to supply electricity to the house without informing the Plaintiffs in writing that the supply was temporary.
I am therefore satisfied that the conduct of the Defendant suggests that a form of agreement as to the supply of electricity did exist
between the parties, and that the question of the termination of that agreement will be a matter for the trial court. For the purpose
of this application I am satisfied that there is a serious question to be tried.
Furthermore, I am satisfied that the Plaintiffs have shown that there are possible breaches by the Defendant of the Fair Trading Decree
1992. The Decree was designed “..... to promote the interests of consumers and the effective and efficient development of industry
trade and commerce through the encouragement of fair competition and to prevent the unfair or undesirable trade practices and to
provide for an equitable competitive and informed and safe market place, and provide for regulation, where necessary, for supply
of goods and services and for related purposes.”
Section 39(1) of the Decree provides as follows:
“Every person commits an offence against this Decree who, whether as principal or agent, and whether by himself or his agent, refuses
to sell any goods or services except on the condition that other goods or services are also purchased from him or from any other
person nominated by him, or attempts to impose any such condition.”
Section 43(2) of the Decree provides:
“A person who offers goods for sale by retail shall not refuse or fail, on demand of a quantity or number of the goods and tender
of the appropriate price, to supply the goods in the quantity or number demanded.”
Section 54 of the Decree provides as follows:
“(1) A person shall not, in trade or commerce engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
(2) Nothing in this Division shall be taken as limiting by implication the generality of subsection (1).”
The facts of this case show that the manifestation of the intention to terminate electricity supply, coincided with the inability
of the parties to agree to a rental arrangement for Lewadua”. Although the Defendants suggest that the Plaintiffs were told in 1998,
this is denied by them, and will clearly be disputed at trial. If the Plaintiffs are believed however, the first intimation of withdrawal
of supply, came in January 2000, when negotiations for the rental agreement had become frustrated. It is not in dispute that the
Defendant Company is the only electricity supplier on the island. I am satisfied that the Plaintiffs have shown that the issue of
whether or not the Defendant Company had been engaged in deceptive conduct in relation to the rental agreement, and whether or not
the Defendant had used its exclusive supply of electricity to force an agreement on the rental arrangements, are serious questions
that warrant trial.
Clearly there are many disputes of fact in this case. However as Lord Diplock said in American Cynamid (supra) at page 510:
“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.”
Damages
Would damages adequately compensate the Plaintiffs for the termination of the electricity supply?
If the supply is cut off by the Defendant, the Plaintiffs will need to construct their own generator. Annexure K to Deng Carlson’s
affidavit suggest that a generator would cost about $24,000 to construct. Clearly the building of a generator can be costed and be
the subject of compensation.
Although the Plaintiffs say that the generator would affect the quiet enjoyment of their house, I am not satisfied that this is so.
Firstly the evidence is that all the other houses on the island (except for one) have their own generators. Secondly, if the Plaintiffs
succeed, the generator can simply be removed thus restoring the former electricity supply. Finally, the evidence shows that the Plaintiffs
are not in permanent residence of the house and that the house is in fact occupied by their domestic staff. There is no evidence
that a generator would adversely affect the house’s market/rental value.
The Defendant Company on the other hand, has shown that the resort is undergoing extensions which require a heavier supply of electricity.
Frequent power failure would affect business. I accept that such loss of business would be difficult to quantify, and more importantly,
difficult to restore in the competitive hotel business. The Defendant therefore may never be adequately compensated in damages. The
injunction should therefore be refused on this ground.
The principle that an injunction lies even where damages are an adequate remedy, if the Plaintiff shows an infringement of a legal
right (Shelfer -v- City of London Electric Lighting Company (supra) would apply where the Plaintiff had established a breach of the right. In this case, whilst the Plaintiffs have shown that
there is a triable issue, I consider that it would be oppressive to the Defendant to grant an injunction to continue with supply,
at the risk of enormous loss of business. Furthermore, I am not satisfied that the Defendant Company in giving 75 days notice to
the Plaintiffs of discontinuance of electricity, acted with “a reckless disregard to the plaintiff’s rights ...” (Shelfer -v- City of London (supra at page 323).
Having refused the injunction in equity, I now turn to section 125 of the Fair Trading Decree 1992. That section provides:
“(1) An injunction under this section may be granted by the Court -
(a) against a person in the course of proceedings against that person for an offence against this Decree; or
(b) at any other time.
(2) If the Court is satisfied, on the application of the Minister, the Director or any other person that a person has engaged,
or is proposing to engage, in conduct that constitutes or would constitute -
(a) a contravention of a provision of this Decree;
(b) attempting to contravene such a provision;
(c) aiding, abetting, counselling or procuring a person to contravene such a provision;
(d) inducing or attempting to induce, whether by threats, promises or otherwise, a person to contravene such a provision;
(e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a
provision; or
(f) conspiring with others to contravene such a provision,
the court may grant an injunction in such terms as the Court determines to be appropriate.
(3) The power of the Court conferred by subsection (2) to grant an injunction restraining a person from engaging in conduct
-
(a) includes, but is not limited to, the power to grant an injunction restraining a person from carrying on a business of supplying
goods or services (whether or not as part of, or incidental to, the carrying on of another business) -
i) for a specified period;
ii) except on specified terms and conditions;
(b) does not include the power to grant an injunction restraining a person from engaging in conduct that constitutes or would
constitute a contravention solely of sections 54 or 55 unless -
i) the application is made by the Minister or the Director on the grounds that a consumer is, or consumers generally are, or would be,
adversely affected by the conduct; or
ii) the application is made by a person who is, or would be, adversely affected by the conduct.
(4) If the Court is satisfied, on application by the Minister or the Director that a person has engaged in conduct constituting
a contravention of a provision of this Decree the Court may grant an injunction requiring that person to take specified action (which
may include the disclosure of information or the publication of advertisements) to remedy any adverse consequences of his contravening
any provision of this Decree.
This subsection does not apply in relation to conduct that constitutes a contravention solely of section 55.
(5) The power of the Court to grant an injunction restraining a person from engaging in conduct may be exercised -
(a) whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of
that kind;
(b) whether or not the person has previously engaged in conduct of that kind; and
(c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engages in
conduct of that kind.
(6) The power of the Court to grant an injunction requiring a person to do an act or thing may be exercised -
(a) whether or not it appears to the Court that the person intends to refuse or fail again, or to continue to refuse or fail,
to do that act or thing;
(b) whether or not the person has previously refused or failed to do that act or thing; and
(c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person refuses or
fails to do that act or thing.
(7) An interim injunction may be granted under this section pending the final determination of the application.
(8) A final injunction may, by consent of the parties, be granted under this section without proof that proper grounds for
the injunction exist.
(9) Where the Minister or the Director applies for an injunction under this section, no undertaking as to damages or costs
will be required.
(10) The Minister or the Director may give an undertaking as to damages or costs on behalf of some other applicant and, in that
event, no further undertaking will be required.
(11) An injunction under this section may be rescinded or varied at any time.”
Counsel for the Plaintiff referred me to the decision of the New Zealand Court of Appeal in Ricegrowers’ Co-operative Ltd. -v- Howling Success Australia Pty Ltd. (1987) ATPR 489 which considered the provisions of section 80 of the Australian Trade Practices Act 1974, which is almost identical
to our section 125. It was held that once the applicant had shown that there was a serious question to be tried in respect of a breach
of the Act, the court should only consider where the balance of convenience lay.
Applying those principles to this case, I have already stated that I am satisfied that there are serious questions to be tried in
respect of alleged breaches of the Decree.
However I am not satisfied that the balance of convenience favours the Plaintiff.
Firstly whilst there are triable issues, the facts disclosed (which are mostly in dispute) thus far do not show a clear breach of
the Decree. As Gummow J said in Ricegrowers’ Co-operative Ltd. -v- Howling Success (supra at page 492), “The balance of convenience may ... be itself affected by the Court’s evaluation or perception of the seriousness
of the question, that is, the weight of the applicant’s case: Castlemaine Tooheys Ltd. -v- South Australia (1986) 60 ALJR at p.682.
Secondly, the cost and inconvenience of installing a generator, are far outweighed by the cost to the Defendant in continuing supply
to the Plaintiffs in respect of the planned extensions, and of the possible loss of clientele because of power cuts. The evidence
shows that the Defendant has assisted the Plaintiffs in plans to construct the generator, and continues to co-operate in that respect.
In the circumstances the balance of convenience does not favour the grant of an interlocutory injunction.
For these reasons, I refuse the Plaintiffs’ application for an injunction restraining the Defendant from terminating electricity supply
to “Lewadua”. The Defendant’s costs are to be paid by the Plaintiffs, which I set at $300.
Nazhat Shameem
JUDGE
At Suva
3rd May 2000
Hbc0189d.00s
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