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Ocean Holdings Ltd v Olympic (Fiji) Ltd [2005] FJHC 576; HBC0245.2002L (26 August 2005)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0245 OF 2002L

BETWEEN:

OCEAN HOLDINGS LIMITED
Plaintiff

AND:

OLYMPIC (FIJI) LIMITED
1st Defendant

AND:

RICK VETAIA SADRANU a.k.a Rick Holland
and DEBROAH SADRANU
2nd Defendants

Consolidated with Action No. HBC0247 of 2002L

BETWEEN:

OLYMPIC (FIJI) LIMITED
Plaintiff

AND:

OCEAN HOLDINGS LIMITED
1st Defendant

AND:

GARRY PERVAN
2nd Defendant

Counsel: Mr. C.B. Young for the plaintiff
Mr. S.K. Ram for the defendants

Date of Hearing: 28 January 2005 and 22 July 2005
Date of Judgment: 26 August 2005

JUDGMENT

This matter comes before the court by way of summons filed on behalf of Ocean Holdings Limited (“Ocean”) and Gary Pervan on the 5^th October 2004. That summons seeks:

1. Determination of a preliminary issue, namely “whether the Charter Agreement entered between the parties in regards to a vessel known as ‘Tamasua Explorer’ has been lawfully terminated by Ocean Holdings Limited”.
   
2. That the existing order or orders of this court be discharged.
   
3. That Ocean Holdings Limited be entitled to possession of the vessel ‘Tamasua Explorer”.
   

The application is made under Order 29 of the Rules of the High Court.

The matter came before the court on the 28^th January 2005 when counsel for the plaintiff and counsel for the defendants relied upon written submissions and advanced further oral submissions. Following that hearing, the court was asked not to deliver judgment as it was anticipated the action would be resolved. On the 22^nd July 2005, the court was advised that the parties were unable to agree and that a ruling was in fact required.

Background

This matter has what could only be described as an appalling history. There are two civil actions in this court which have been consolidated. The matter has been to the Fiji Court of Appeal where the appeal filed by Ocean was dismissed.

In all, there have to date been four rulings. The first ruling is a ruling of Mr. Justice Byrne dated the 28^th October 2002 followed by a further ruling dated the 6^th June 2003. I made a ruling dated the 11^th June 2004 and the Fiji Court of Appeal issued its judgment on the 16^th July 2004. Regrettably, the views expressed by the Court of Appeal and by this court that the matter be resolved have fallen on deaf ears.

The Cause of Action

The plaintiff and the defendant entered into a demise charter over the vessel, Tamasua Explorer. Prior to the demise charter, there were apparently extensive negotiations which resulted in the vessel Tamasua Explorer coming to Fiji. After the execution of the demise Charter Agreement, it would appear that problems arose between the parties which resulted in the commencement of the proceedings before the court and then led to the first decision of Mr. Justice Byrne. Most relevantly, in that first decision, Mr. Justice Byrne said at page 9:

“It will be seen from these two letters that an important issue of fact arises, namely whether the Demise Charter has been terminated. This was actually the first submission made to me by Mr. Ram who said that even if the Charter fees claimed by Ocean Holdings were not paid by Olympic this did not constitute a substantial breach which would justify repudiation of the Charter.”

The application that led to the second decision of Mr. Justice Byrne was brought by Ocean. It applied for a declaration that the Charter Agreement had been brought to an end by letter dated 29 October 2002. It was this decision that was considered by the Fiji Court of Appeal in its judgment of the 16^th July 2004.

The Fiji Court of Appeal in its judgment at page 4 said:

“There are a number of issues to be determined in the principal proceedings filed on 24 July 2002 and in the proceedings brought by Olympic which have been consolidated with the proceedings brought by Ocean. Olympic’s proceedings were commenced by writ of summons dated 25 July 2002. One of those issues will be whether the charter agreement was effectively terminated by either of the letters earlier quoted or by a later letter dated 12 March 2003 purporting to terminate the agreement for non-payment of hire. That is, of course, if it is permissible to raise matters of substance which have arisen after the commencement of the proceedings. This is not a matter on which we express any view. No submission was made to us in relation to it.” (emphasis added)

At page 5 of this judgment, the Court of Appeal said:

“The High Court has jurisdiction to order the separate trial of an issue or question which arises for determination in principal proceeding; see Order 33, Rule 4 of the High Court Rules. But that is the only means by which such a question may be dealt with.”

Later on page 5, the Fiji Court of Appeal further said:

“Having read the ruling made by Byrne J. the subject of this appeal and an earlier ruling made by him on 28 October 2002 and having listened to the submission made to us by counsel for Olympic we are of opinion that there may well be reasons why it would not be appropriate to make an order for the separate trial of the question whether Ocean has effectively determined the agreement. We do not express any concluded view about the matter because it is not before us and there may be many factors to be taken into account of which we are unaware.” (emphasis added)

It is not in dispute that Olympic (Fiji) Limited is in liquidation (Diesel Ltd v Olympic (Fiji) Ltd – High Court Action No. HBF0028 of 2004).

The Winding Up of Olympic

Section 229 of the Companies Act provides:

“When a winding-up order has made or any interim liquidator has been appointed under section 236, no action or proceeding shall be proceeded with or commenced against the company, except by leave of the court and subject to such terms as the court may imposed.”

No application for leave has been made to the court in compliance with section 229.

Order 33 of the High Court Rules

As was pointed by the Fiji Court of Appeal, the only means by which a separate question can be tried is pursuant to Order 33 of the High Court Rules. The current application before the court is made pursuant to Order 29 of the High Court Rules. Order 29 relates to interlocutory injunctive relief.

The Rulings of Byrne J.

In his ruling of the 6^th June 2003 at page 4, Byrne J said:

“In my Ruling I stated that there were serious questions still awaiting resolution in this case among them being whether by an earlier notice of the 18^th July 2002 from Ocean Holdings then solicitors to Olympic the Charter Agreement had been terminated...... The questions cannot be resolved by a second notice to terminate the Agreement given immediately after my Ruling was handed down.”

His Lordship went on to dismiss the summons filed on behalf of Ocean. The relief sought in that summons included:

“The declaration that the Charter Agreement between Ocean Holdings Limited and Olympic (Fiji) Limited regarding the vessel “Tamasua Explorer” will terminate on 28 November 2002 pursuant to Young & Associates letter dated 29 October 2002.”

Conclusion

It is now over 12 months since I said “the matter is one that should in the interests of the parties be resolved at an early date, as any delayed litigated outcome would appear to me to result in a loss for both parties”. These comments were endorsed by the Fiji Court of Appeal in their judgment of the 16^th July 2004. It is regrettable that the parties have not seen fit to heed these remarks. The consequence of their actions is obvious.

The summons before the court seeks relief not available upon an application under Order 29 of the High Court Rules and seeks orders against a company that has been wound up and leave has not been sought pursuant to section 229 of the Companies Act to continue or commence proceedings. In addition, the issue of the termination of the Charter Agreement has been a dominant question in the rulings of Byrne J. The matter cannot be relitigated.

The other orders sought in the summons require a vacation of the existing orders and effectively an order that would see the vessel pass to Ocean’s control. There is no material before me that would justify the granting of either of these orders.

Orders of the Court

1. Summons dated 4 October 2004 is dismissed.

2. The applicant is to pay the respondents’ costs as assessed or agreed on the higher scale.
   

JOHN CONNORS

JUDGE

At Lautoka

26 August 2005