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Waidroka Bay Ltd v Campbell [2002] FJHC 251; HBC0402d.2001s (31 July 2002)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0402 OF 2001

Between:

WAIDROKA BAY LIMITED
WAIDROKA BAY RESORT LIMITED
WILLIAM ARTHUR PICKERING and
MAREE JANE PICKERING
Plaintiffs

and

DONNA CAMPBELL and
BRIAN McDONALD
SURFING FIJI ADVENTURES LIMITED
Defendants

Mr. S. Parshotam for the Plaintiff
Mr. T. Fa for the Defendants

DECISION

By Summons dated 3rd October 2001 the Plaintiff seeks the following Orders:-

1. That the 1st and 2nd Defendants by themselves, their agents, their servants, their employees or in any manner whatsoever be restrained from carrying on and carrying out any commercial undertakings or business enterprises including tourism related activities such as surfing, diving, snorkelling, fishing, boating and other water sport including, but not limited to, accommodation and bed and breakfast and dining facilities on, about or from the property of the 2nd Defendants namely, Certificate of Title No. 29428 being Lot 8 on Deposited Plan No. 7618, and within a reasonable radius of the Waidroka Bay area (Athe Business@).
   
2. That the 1st and 2nd Defendants forthwith withdraw all advertising of the Business from all media (both in Fiji and overseas) including all advertising on the Internet.
   
3. That the 1st and 2nd Defendants be restrained from directly or indirectly making contact (either written or oral) of any kind whatsoever, enticing, soliciting or interfering with the 2nd Plaintiff=s business connections, guests, potential guests and its customers, including but not limited to, the Native Landowners of the Waidroka Bay area.
   
4. That the 1st and 2nd Defendants by themselves, their agents, their servants, their employees and their guests and invitees be restrained from trespassing or in any manner whatsoever using the property of the 3rd Plaintiffs namely, Certificate of Title No. 28658 being Lot 2 on Deposited Plan No. 7353.
   
5. That the Defendants pay the costs of and incidental to this application.
   

Three affidavits in support of the application were filed by Ms Nancy Guin, Mr. David Charles Miller and Mrs. Marie Jane Pickering. In opposition there are three affidavits of Donna McDonald all sworn on 12 October 2001.

Background facts

The background facts surrounding this case are set out in detail in Mr. Parshotam=s written submission and it is important that I give a picture of the situation and the problems that exist as briefly as possible and I can do no better than set them out hereunder as follows (in Mr. Parshotam=s own words).

In or about 1993, Waidroka Bay Ltd (the AWBL@) (the Plaintiff) purchased approximately 298 acres of freehold land situated at Waidroka in Serua. In or about 1996, WBL commenced a subdivision project of this land. Some 160 residential lots of approximately 1 2 to 2 acres each and 1 lot marked as resort site were created. The resort site was the only commercial site in the Waidroka subdivision area.

Sometime in 1994, Nancy and Raymond Guin (Athe Guins@) set up Waidroka Bay Resort Ltd (AWBRL@) (the 2nd Plaintiff). They purchased the resort site from WBL for US$200,000.00.

Sometime in April 1995, one of the residential lots was purchased by William and Marie Pickering (A the Pickerings@) (the 3rd Plaintiffs) from WBL.

Sometime in October 1995, one of the residential lots was purchased by Brian and Donna McDonald (Athe McDonalds@) (the 1st Defendants) from WBL for AU$33,000.00.

Sometime in 1998, WBRL engaged the McDonalds to conduct a guided surf tour company and accommodation facilities. An arrangement was entered into where Donna McDonald was employed by WBRL within the structure of and for the McDonalds to provide a guided surf tour as an adjunct to WBRL=s operations.

In order to support this arrangement, Nancy Guin signed a letter dated 12 Jan 1998 (Annexure AC@ of Nancy Guin=s Affidavit) giving support to McDonald=s application to establish a guided surf tour facility.

In October 1998, the McDonalds incorporated >Surfing Fiji Adventures Limited= (ASurfing Fiji@) (the 2nd Defendant).

However, as of June 1999, the McDonalds and Surfing Fiji started operating a homestay, retreat including boating, snorkeling, surfing and other water sports from the lot owned by the McDonalds.

Soon thereafter, they started interfering with various business connections of WBRL.

In doing so, they unlawfully used the lot owned by the Pickerings as an accessway to the beach frontage. Note that the lot owned by McDonald does not front up to the beach to the Waidroka area.

Application from WBRL to operate any form of commercial activity has been rejected by the Director of Town and Country Planning.

Defendants= background facts

Mr. Fa has given the background facts regarding the defendants and it is as follows (in Mr. Fa=s own words):

The First Defendants (the McDonalds) are a married couple and are originally from Australia. The Second Defendant is a locally registered company in which the McDonalds hold shares. Brian McDonald is the chief librarian at the Queensland University in Suva. Donna McDonald runs their business under the Second Defendant=s name which is a Fiji Trade & Investment Board approved business. The McDonalds in October, 1995 bought this piece of freehold residential land at Waidroka Estate in Serua being Lotd 8 D.P. No. 7618 on C.T. 29428. At the time the McDonalds bought this piece of land from the First Plaintiff, they were encouraged by its Managing Director Mr David Miller to operate any business therefrom and in particular he recommended that the McDonalds manufacture surf boards from there - see paragrph 10 of Donna McDonald=s affidavit in reply to David Charles Miller=s. The McDonalds decided to do surf tour and accommodation from their piece of land and before approaching Fiji Trade & Investment Board hereinafter to be called FTIB with their proposal, they sought the support of the Second Plaintiff Waidroka Bay Resort Limited - see Annexure D of Donna McDonald=s affidavit in reply to that of Nancy Guin. With the support of the First Plaintiff and the Second Plaintiff, the FTIB, in a letter dated 18.1.1999 to the McDonald=s Accountant Messrs Seru & Associates approved their surfing tours incorporating bed and breakfast accommodation from their home at Waidroka Estate under the name Surfing Fiji Adventures Limited - see Annexure B in Donna McDonald=s affidavit in answer to David Charles Miller.

About June 2000 the McDonalds were visited by the Navua Rural Local Authority who advised them that they needed a Hotel Licence for what they were doing. This application for a Hotel Licence was rejected by the Director of Town & Country Planning. The Navua Rural Local Authority suggested that they should try and apply for a HOME STAY which they did. The McDonald=s application for a HOME STAY was declined by the Director of Town & Country Planning in a letter dated 31.7.2001 - see Annexure X of Nancy Guin=s affidavit that was sworn on 2.10.2001. This decision was conveyed to the McDonalds in a letter dated 14.8.2001 by the Navua Rural Local Authority - see Annexure G in Donna McDonald=s affidavit in reply to David Charles Millers= affidavit. On 19.9.2001 the McDonalds appealed to the Minister against the decision of the Director of Town & Country Planning in accordance with Section 5(i) of the Town Planning Act, Cap. 139. The Minister disallowed the appeal in a letter dated 23.1.2002. In Suva High Court Judicial Review Action No. 002/02 State v. Director of Town & Country Planning Ex-parte: Donna & Biran McDonald, the McDonalds have now sought a Judicial Review of the Director of Town & Country Planning=s decision.

Plaintiffs= contention

The first plaintiff=s contention is about the defendant=s use of land, that is, they are using it for commercial purposes as a resort or homestay when it is supposed to be used for residential purposes.

The second plaintiff=s contentions are as follows (as contained in Mr. Parshotam=s submissions):

1. That the Defendants have held themselves out and continue to hold themselves out as and are in fact operating a resort type facility from their land as if it were the 2nd Plaintiff=s resort;
   
2. That the Defendants are holding themselves out as being the only competent and lawful operators of a resort in the Waidroka area when in fact it is the 2nd Plaintiff which is operating the only legal resort in the Waidroka area;
   

100. That the Defendants have made representations to business connections, past and present guest and native landowners who have an interest in the operations of the 2nd Plaintiff=s business in a manner discrediting the 2nd Plaintiff so as to harm the business and goodwill of the 2nd Plaintiff and the resort that it operates.
     

4. That the Defendants have engaged themselves in a manner and continue to do so to interfere with the contractual arrangements that the 2nd Plaintiff has with the native landowners over the relevant waters facilitating the proper operation of the 2nd Plaintiff=s resort activities and thereby have induced the native landowners to break such contractual arrangements.
   

The third plaintiff=s submission is:

that the Defendants have trespassed and caused nuisance by allowing their guests to have access and usage of the 3rd Plaintiff=s property (CT28658) for purposes of ingress, regress, access, and informal gatherings without any lawful authority from the 3rd Plaintiff.

Consideration of the issues

This application for interim injunction is made under Order 29 of The High Court Rules 1988 which allows for injunctive relief or orders in any action at any stage of the proceedings.

On the affidavit evidence before me I find that this case is one which cries out for an injunctive relief.

It is not the court=s function at this stage to delve into the merits of this case suffice it to say that there is strong evidence, inter alia, that the defendants are in breach of the designated use of the land in question as stated by the plaintiffs.

It appears that on the one hand the plaintiffs have gone about their business in a proper and legal manner, whereas the defendants have done completely the opposite. They have, it seems abused the law and private rights not only for their own benefits but have caused loss and expense to the plaintiffs. The defendants are using their land for commercial purposes when they can only use it for residential purposes. Apart from that they are announcing and advertising the second defendant as a provider of homestay, accommodation, meals, surfing and other leisure water sports and that is in direct conflict with the activities that are being carried on by the second plaintiff to the point where it is having a significant impact on the viability of second plaintiff=s business. The defendants are evidently trespassing on the third plaintiff=s land thereby damaging the vegetation.

The plaintiffs are seeking certain injunctive reliefs as stated hereabove.

The principles applicable to the grant interlocutory injunction are as stated in the leading case of American Cyanamid Co. v Ethicon Ltd [1975] UKHL 1; [1975] AC 396.

To give interlocutory injunction is a discretionary matter and the Court is guided by well-founded principles which are well stated as appears from the following extract from Spry, Equitable Remedies, 3rd Ed. at p.430 which is apt and is to be borne in mind:

AAn interlocutory injunction is an injunction that is directed to ensure that particular defined acts do not take place or continue to take place pending the final determination by the Court of the rights of the parties; and accordingly it issues in a form that requires that, in the absence of a subsequent order to the contrary, it should continue up to but not beyond the final hearing of the proceedings. The two matters with which the Court is concerned in granting an injunction of this kind are, first, the maintenance of a position that will most easily enable justice to be done when its final order is made, and secondly, an interim regulation of the acts of the parties that is, in other respects, most convenient and reasonable in all the circumstances.@

In Cyanamid case, the House of Lords there decided that in all cases, the Court must determine the matter on a balance of convenience, there being no rule that an applicant must establish a prima facie case. The extent of the court=s duty in considering an interlocutory injunction is to be satisfied that the claim is not frivolous or vexatious, in other words, that there is a serious question to be tried.

Lord Diplock in Cyanamid (supra) said at page 407:

AIt 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 the 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...@

In Cyanamid (supra) at page 406 Lord Diplock further stated the object of the interlocutory injunction thus:

A...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 Athe balance of convenience@ lies@. (emphasis mine)

A similar view was expressed by McCarthy P in Northern Drivers Union v Kuwau Island Ferries (1974) 2 NZLR 617 when he said:

AThe purpose of an interim injunction is to preserve the status quo until the dispute has been disposed of on a full hearing. That being the position, it is not necessary that the Court should have to find a case which would entitle the applicant to relief in all events: It is quite sufficient if it finds one which shows that there is a substantial question to be investigated and that matters ought to be preserved in status quo until the essential dispute can be finally resolved:.....@ (ibid, 620).

AIt is always a matter of discretion, and ... the Court will take into consideration the balance of convenience to the parties and the nature of the injury which the defendant, on the one hand, would suffer if the injunction was granted and should ultimately turn out to be right and that which the plaintiff, on the other hand, might sustain if the injunction was refused and he ultimately turn out to be right.@ (ibid 621).

On the granting of interlocutory injunction I also refer to the following passage from the judgment of Lord Denning in Hubbard & Another v Vosper & Another (1972) 2 WLR 389:

AIn 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. Sometimes it is best to grant an injunction so as to maintain the status quo until the trial. At other times, it is best not to impose a restraint upon the defendant but leave him free to go ahead. For instance, in Fraser v Evans [1969] 1 QB 349, although the plaintiff owned the copyright, we did not grant an injunction, because the defendant might have a defence of fair dealing. The remedy by interlocutory injunction is so useful that it should be kept flexible and discretionary. It must not be made the subject of strict rules.@

As is well known in considering the grant of an interlocutory injunction, as stated in Cyanamid, the Court considers the following matters: (a) is there a serious issue to be tried?; (b) are damages an adequate remedy?; (c) where does the balance of convenience lie? and (d) are there any Aspecial factors@?

In this case no doubt there is a >serious question to be tried=. The Court is satisfied that the claim is not frivolous or vexatious.

As far as >adequacy of damages= is concerned I find that it is inadequate on the facts of this case. In this regard I bear the following words of Lord Diplock in Cyanamid:

AThe governing principle is that the Court should first consider whether, if the Plaintiff were to succeed at the trial in establishing his right to a permanent injunction, he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendants continuing to do what was thought to be enjoined between the time of the application and the time of the trial.@

As for >balance of convenience=, it is an important factor to be considered. As Somers J said in Congoleum Corp. Ltd v. Polyfor Products (NZ) Ltd [1979] 2 NZLR 510 at 571:

A[It] involves a decision as to whether the granting of an injunction or its refusal is the course which, after the action itself has been tried, and the issues between the parties determined, would best allow the adjustment of the rights of the parties in a way that accords with fairness and justice.@

The balance of convenience I find falls in favour of the plaintiffs.

As stated by Mr. Parshotam special factors could include, inter alia, matters such as parties coming to Court with clean hands, public interests, conduct of the defendant and the nature of the breach of public and private laws.

Conclusion

To sum up having analysed the affidavit evidence before me, and after considering the submissions made by both Counsel, I consider that the plaintiffs are entitled to injunctive reliefs sought by them.

Applying the principles as stated by Lord Diplock to the facts of this case, I find that there is a serious question to be tried; damages are not an adequate remedy and the scale tips in favour of the plaintiffs as far as the balance of convenience is concerned.

In the outcome for the reasons I have given I grant an interlocutory injunction and make the orders as prayed in the Summons in items 1, 3 and 4 (as outlined hereabove on page 2 of this Decision) until further order of this Court. The costs are to be costs in the cause.

D. Pathik
Judge

At Suva
31 July 2002