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Denarau Investments Ltd v Satendra Prasad Investment Ltd [2006] FJHC 74; HBM020.2006 (15 September 2006)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL APPEAL NO. HBM 20 OF 2006

NO. 187 OF 2006

BETWEEN

DENARAU INVESTMENTS LIMITED
Appellant

AND

SATENDRA PRASAD INVESTMENT LIMITED
Respondent

Appearances: Munro Leys for the appellant
Messrs Suresh Maharaj & Associates for the respondent

Hearing: 22 August 2006
Decision: 15 September 2006

JUDGMENT
[Stay application]

[1] The summons which is before me asks for the following orders on behalf of the appellant:

(i) that the execution and all further proceedings to enforce the judgment of the Magistrate S M Shah delivered on 27 July 2006 in Nadi Magistrates’ Court Civil Action No. 53 of 2006 (the judgment) be stayed pending the determination of this application

(ii) that the execution and all further proceedings to enforce the judgment be stayed pending the determination of the appellant’s appeal to the High Court of Fiji

(iii) such further relief as the court sees fit.

[2] The application is supported by an affidavit of Mr. Richard Cleave and is opposed.

The relevant principles

[3] The principles to be applied were considered by the Fiji Court of Appeal in Natural Waters of Viti Limited –v- Crystal Clear Mineral Waters (Fiji) Limited – Civil Appeal No. ABU 0011 of 2004. The court at page 3 of its judgment expressed the relevant principles as follows:

"The principles to be applied on an application for stay pending appeal are conveniently summarized in the New Zealand text, McGechan on Procedure (2005):

‘On a stay application the Court’s task is "carefully to weigh all of the factors in the balance between the right of a successful litigant to have the fruits of a judgment and the need to preserve the position in case the appeal is successful": Duncan v Osborne Building Ltd (1992) 6 PRNZ 85 (CA), at p. 87.

The following non-comprehensive list of factors conventionally taken into account by a Court in considering a stay emerge from Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48, at p. 50 and Area One Consortium Ltd v Treaty of Waitangi Fisheries Commission (1993) 7 PRNZ 200:

(a) Whether, if no stay is granted, the applicant’s right of appeal will be rendered nugatory (this is not determinative). See Philip Morris (NA) Ltd v Liggett & Myers Tobacco Co (NZ) Ltd [1977] 2 NZLR 41 (CA)

(b) Whether the successful party will be injuriously affected by the stay

(c) The bona fides of the applicants as to the prosecution of the appeal

(d) The effect on third parties

(e) The novelty and importance of questions involved

(f) The public interest in the proceeding

(g) The overall balance of convenience and the status quo."

Consideration of application

[4] Applying the facts of this application to those principles, there is a strong argument that if the stay is not granted the appeal will be rendered nugatory in that the execution of the judgment would mean the removal of the Site Office (disputed property) from the appellant’s premises. The consequences of removal would defeat the appellants appeal. The appellant contends that the removal of the disputed property from its present location, prior to the completion of construction operations it is engaged in will result in substantial loss of income to the appellant which may be irrecoverable. I agree. I have concluded on the material before me that there is a real risk that it may not be possible for the appellant to be restored substantially to its former position if the judgment is executed but as the Fiji Court of Appeal has said this is not in itself determinative.

[5] The second factor for consideration is whether the successful party will be injuriously affected by the stay. I have upheld the appellant’s submission that given that the disputed property has always been in the appellant’s premises, the respondent is not likely to be injuriously affected by the stay. The respondent has not disclosed the nature of the prejudice it will suffer. Aside the complaint of being deprived of the use of the disputed property and a list of items and chattels, it allegedly owns (the ownership of which is the subject matter of the dispute), the injurious impact has not been sufficiently established by the respondent. It does not contend that it’s operations would in any way be adversely affected. In essence it maintains that it owns the disputed property and as such the property should be returned because the appellant is being unjustly enriched by retaining possession.

[6] The third factor is the bona fides of the appellants as to the prosecution of the appeal. Having considered the grounds of appeal and the material filed in these proceedings, I have concluded that the appellant has shown it has an arguable case. Clearly this is not a situation where it can be said that the appeal has no prospect of success. What is clear is that there was and continuous to be a serious dispute about ownership of the disputed property. I also have difficulty seeing how the respondent was able to establish that grave damage would have accrued to it had the mandatory injunction not been granted by the Nadi Court – it is trite law that the threshold is higher in mandatory injunction applications. I have upheld the appellants submission that the principles applicable to whether or not a mandatory injunction be granted as expressed in Redland Bricks Ltd –v- Morris (1969) 2 All ER 576, appear not to have been correctly applied (if at all) by the Nadi Court. The competing affidavit material demonstrates the existence of strongly contested issues of fact. The appellants submission that in the circumstances on mandatory injunction should not have been granted has much merit. The appellant’s contention that the Nadi court does not have and did not have jurisdiction to entertain the action is supported by the statement of claim filed in the Nadi court. At paragraphs 9 and 10 the respondent stated that it would file High Court proceedings after retrieving the disputed property.

[7] Factor (d) is the effect on third parties. I am satisfied on the material before me that any adverse effect on third parties is likely to be to the appellant’s detriment and not to the respondent.

[8] There are no novels or important questions involved in the appeal and there is no public interest in the proceedings which leads to the ultimate factor and that is the overall balance of convenience and the status quo. In attempting to determine the overall balance of convenience, I am cognizant that the property in dispute may not be recoverable by the appellant if a stay is not granted. I am cognizant of authorities that clearly indicate that the jurisdiction to grant mandatory injunction is a jurisdiction to be exercised sparingly and with caution and should only be granted where the applicant shows a very strong probability on the facts that grave damage will accrue to it in the future. There is no such evidence before me. Having weighted all the factors in the balance I find there is a greater need to preserve status quo. I am of the view that the overall balance of convenience requires that a stay be granted.

My orders

(i) Execution and all further proceedings to enforce the judgment is stayed pending the determination of the appellants appeal against the judgment

(ii) Costs of the application shall be costs in the cause.

Gwen Phillips
JUDGE

At Lautoka
15 September 2006