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Credit Corporation Fiji Ltd v Diston [2008] FJHC 248; Civil Action 220.2008 (7 October 2008)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No: 220 of 2008

BETWEEN:

CREDIT CORPORATION FIJI LIMITED
Plaintiff

AND:

STEPHEN JOHN DISTON
First Defendant

AND:

SUNIA CAMA
Second Defendant

AND:

ANDREW KAMAL
Intervener

Ms S Devan for the Plaintiff
Mr M Benefield for the Defendants
Ms A Neelta for the Intervener

Date of Hearing and Ruling: 7 October 2008

INTERLOCUTORY RULING

[1] This is an application by the Plaintiff for interim relief by way of inter-parte Motion for the Defendants to immediately release to the Plaintiff a motor vehicle pending the final hearing of the substantive action. There is also a Notice of Motion filed by the Interested Party on 26 September 2008 seeking a formal Order that he be included as an Intervener in these proceedings.

[2] Counsel for the Defendants has objected to both Motions on the basis that the First Defendant’s Notice of Distress takes priority to the Asset Purchase Agreement signed on the 29 September 2005 between the Plaintiff, the Interested Party and a deceased party (who was also allegedly one of the parties liable for arrears of rent to the First Defendant).

[3] When the matter first came before this Court on an ex-parte basis on 17 July 2008 an interim order was granted restraining the Defendants and/or its servants or agents from selling, transferring or otherwise in any manner disposing the vehicle ER 496. The matter was then adjourned until 25 July 2008 and orders were made for advertising in the three major daily newspapers in Fiji.

[4] On 25 July 2008 Counsel appeared for the First and Second Defendants wherein the Court was advised that an agreement had been made for the sale of the said vehicle on 9 July 2008 and the First Defendant was holding funds in relation to that sale in the amount of $4,000. The matter was then adjourned to 6 August 2008.

[5] On 6 August 2008, Counsel appeared for the Plaintiff and Counsel again appeared for the First and Second Defendants and the matter was put over until the following day.

[6] On 7 August 2008, Counsel appeared for the Plaintiff and Counsel again appeared for the First and Second Defendants. In addition, ANDREW KAMAL appeared in person as an Interested Party and the matter was put over until 21 August 2008 to allow Mr Kamal to obtain legal advise, as well as for Mr Kamal and Counsel for the Plaintiff to seek to resolve their matter as well as for Mr Benefield of Counsel to obtain further instructions from the Defendants.

[7] On 21 August 2008, Counsel for the Defendants appeared and the matter was put over for further mention on 4 September 2008.

[8] On 4 September 2008, Counsel appeared for the Plaintiff as well as Counsel again for the First and Second Defendants. The Interested Party again appeared in person. It was noted that the interested party was having discussions with the Plaintiff and the matter was put over for further mention on 12 September 2008.

[9] On 12 September 2008, Counsel appeared again respectively for the Plaintiff and for the First and Second Defendants. In addition, Ms Neelta of Counsel appeared on behalf of the Interested Party. The Plaintiff was given liberty to file within 14 days a response to both the Affidavit and Defence filed the Defendants. The interested party was to file any counter claim and seek to intervene within 14 days. The matter was put over until 2 October 2008.

[10] On 2 October 2008, all Counsel appeared on behalf of the respective parties. Counsel for the Plaintiff and the interested party sought release of the said motor vehicle. The Court indicated that it would not be making such an order that day, however, the matter was to be adjourned until 7 October 2008 when time would be put aside during that day to hear and rule on the interim applications. Liberty was granted to the Plaintiff to file any affidavit it required.

[11] When the matter came before the Court this morning, 7 October 2008, it was indicated by Counsel who appeared on behalf of the respective parties that settlement could not be reached in the matter and Counsel for the Plaintiff and interested party sought that their Motion be dealt with today. Counsel for the First and Second Defendant sought an adjournment to file further affidavit material. The Court indicated, however, that the parties had been put on notice on 2 October 2008 that the two interim Motions would be dealt with today. The matter was then stood down until 11.30 a.m. to allow the parties to prepare for an interim hearing.

[12] The documentation before the Court is as follows:

(a) Statement of Claim filed on 11 July 2008 by the Plaintiff seeking return of the said vehicle and costs;

(b) Inter-Parte Notice of Motion filed on 11 July 2008 seeking return of the said vehicle and costs;

(c) Affidavit of Pravin Dayal (Collection Officer with the Plaintiff company) sworn on 10 July 2008 and filed on 11 July 2008;

(d) Statement of Defence filed on 1 September 2008;

(e) Affidavit in Reply and in Opposition sworn on 6 August 2008 and filed 1 September 2008 by STEPHEN JOHN DISTON (First Defendant)

(f) Notice of Motion filed on 26 September 2008 by Andrew Kamal seeking to intervene in the proceedings;

(g) Affidavit In Support by Andrew Kamal sworn on 26 September 2008;

(h) Affidavit in Response by Pravin Dayal sworn on 2 October 2008 and filed on 6 October 2008.

[13] After having read the above material, the Court then invited Counsel for the respective parties to address it. Counsel for the Plaintiff tendered written submissions as well as citing Abingdon Rural District Council v O’Gorman [1968] 2 QB 811 and also Distress for Rent Act [Cap 36]. Counsel for the Defendants tendered Halsbury 4th edition paragraph 227 (What may and What may not be Distrained); paragraph 857 (Distress on demised premises only); paragraph 763 (Distress for Rent) and Kaur v ANZ Bank (Unreported, Court of Appeal Fiji Islands, 11 February 1999, Thompson J) (Paclii: 1999 FJCA 7). Counsel for the interested party cited Woodfalls Law of Landlord and Tenant (27th Edition) at paragraph 818 (Right to distrain terminated by payment or tender).

[14] In a nutshell, the issue in this case concerns whether the Plaintiff’s Asset Purchase Agreement takes priority over the Notice of Distress issued by the First Defendant in February 2008. There were a number of allegations made from the Bar Table concerning ownership of the vehicle as well as the Notice of Distress which would require full ventilation at a final hearing. In the meantime the Court is asked to consider where the vehicle should be pending the final hearing.

[15] Counsel for the Plaintiff had quite rightly cited to the Court the test as laid out American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396 for the granting of an Interlocutory Injunction that is:

(a) Whether there is a serious issue to be tried that must be established by the Plaintiff;

(b) Whether damages would be inadequate to compensate the Plaintiff;

(c) Whether the balance of convenience favours the Court exercising its discretion in ordering that the vehicle be returned to the Plaintiff.

[16] Counsel for the three parties agreed with the indication by the Court that in its view there was a serious issue to be tried here. That is, the legal priority of an Asset Purchase Agreement over a Distress Notice.

[17] On the question of whether damages would be inadequate to compensate the Plaintiff, Counsel for the Plaintiff noted because of the actions of the Defendants the vehicle had been seized from the interested party who had allowed the account to fall into arrears which has continued since July 2008. Counsel noted that there is the payment of arrears, interest and legal costs and that by the Court ordering the vehicle to be returned to the Plaintiff in the interim, the interested party and the Plaintiff could arrange for those arrears to be brought up to date pending the final hearing. If the vehicle is not returned then the Plaintiff cannot say that the arrears and the total amount due under the Asset Purchase Agreement is ever going to be paid whereas the First Defendant has advertised and tentatively sold the vehicle for an agreed amount of $4,000. Therefore, for the First Defendant damages are set at $4,000 plus the costs of these proceedings. In addition, Counsel for the Plaintiff indicated to the Court that their client had given an undertaking as to damages as per paragraph 18 of the Affidavit of Pravin Dayal sworn on 10 July 2008 and she had instructions that they would abide by that undertaking.

[18] Counsel for the Defendants conceded that the Plaintiff was a substantial corporation and that the amount of damages was $4,000 plus costs. He indicated that he did not have instructions to concede that the vehicle be returned on an interim basis subject to undertakings and the issues of the status quo and balance of convenience was a matter for the Court.

[19] Counsel for the interested party indicated that her client was prepared to give an undertaking not to dispose of the vehicle pending the final hearing should the vehicle be returned to her client by the Plaintiff once the arrears outstanding on the Asset Purchase Agreement had been brought up to date.

[20] In view of the above the Court is of the view as follows:

(a) That there is a serious issue to be tried as sensibly conceded by Counsel for the Defendants;

(b) That the Court accepts the submission of Counsel for the Plaintiff that damages would be an inadequate remedy for the reasons she has given and the balance of convenience lies with the Plaintiff such that the proper course would be for the Court to order the release of the vehicle by the Defendants to the Plaintiff on the undertaking of the Plaintiff to pay damages should they be unsuccessful at the final hearing and also the undertaking of both the Plaintiff and the interested party not to dispose the vehicle pending the final hearing.

[21] The Court makes the following Orders:

(a) That the Defendants immediately release to the Plaintiff the vehicle description of which is Suzuki Vitara Wagon, Chasis No. TDOIV153094, vehicle registration number ER 496;

(b) That Andrew Kamal be included as an Intervener in these proceedings;

(c) The cost of this matter be costs in the cause.

AND THE COURT NOTES THE FOLLOWING UNDERTAKINGS:

(a) That Pravin Dayal in paragraph 18 of his Affidavit sworn on 10 July 2008 has given an undertaking on behalf of the Plaintiff as to any damages that the Defendants may suffer by reason of the injunctive orders being made.

(b) That Counsel for the Plaintiff has confirmed the above undertaking in Court today on 7 October 2008 and further that the Plaintiff undertakes not to dispose of the said vehicle until the final hearing (other than returning it to the Intervener upon his bringing up to date any arrears outstanding under the Asset Purchase Agreement);

(c) That Counsel for the Intervener has given an undertaking in Court today on 7 October 2008 on behalf of her client not to dispose of the said vehicle until the final hearing should it be returned to him upon his bringing up to date any arrears outstanding under the Asset Purchase Agreement.

Thomas V Hickie
Judge

Solicitors:
Neel Shivam Lawyers, Barristers & Solicitors for the Plaintiff
Michael D Benefield, Barrister & Solicitor for the Defendants
NeeltaLaw, Barrister & Solicitor for the Intervener