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Natadola Bay Resort Ltd v Chetty [2009] FJHC 371; HBC202.2009 (12 August 2009)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. 202 OF 2009

BETWEEN:

NATADOLA BAY RESORT LIMITED
PLAINTIFF

AND:

NARENDRA SWAMY CHETTY
DEFENDANT

Ms R Devan for the Plaintiff
Mr S Sharma for the Defendant

DECISION

This is an application by the Plaintiff seeking the following orders:

"(1) An injunction restraining the Defendant from leaving the jurisdiction of this Honourable Court until the determination of the within proceedings;

(2) an injunction restraining the Defendant from selling and/or disposing of and/or transferring and/or dealing with and/or removing from the jurisdiction of this Honourable Court any and all assets and monies of the Defendant until further order of this Court;

(3) That the Defendant do file a full statement of his assets, where ever located, with this Honourable Court within fourteen (14) days of service of this order;

(4) That a Writ of Ne Exeat Civitate shall be issued forthwith commanding and conveying the Defendant forthwith before a judge of this Honourable Court unless the Defendant shall deposit a sum deemed appropriate by the Court or surrender his passport and travelling documents and/or give to the Plaintiff a Bond executed by the Defendant for security satisfactory to the Plaintiff that the Defendant will not leave the jurisdiction without notice to this Honourable Court.

(5) That costs of this Application shall be paid by the Defendant."

The application was made by way of ex parte Notice of Motion dated 9 July 2009. In support of its application the Plaintiff filed an affidavit sworn by Mosese Nakabea on 9 July 2009.

The application came before me in Chambers on 13 July 2009. On that day an interim mareva order in the amount of $2800 was made together with a disclosure order. It was also ordered that the application proceed as an inter partes application and was adjourned to 16 July 2009. On that day I ordered that the Defendant file an answering affidavit by 22 July 2009 and the further hearing of the application was adjourned to 23 July 2009. The interim orders were extended to that date.

The Defendant filed his answering affidavit on 22 July 2009. On 23 July 2009 the Plaintiff was given leave to file a reply affidavit by 29 July 2009 and the hearing of the application was listed for 30 July 2009.

At the commencement of the hearing Counsel for the Plaintiff indicated that the Plaintiff did not intend to file a reply affidavit and would rely on the material in the supporting affidavit.

The principal relief sought by the Plaintiff is a mareva (freezing) order. The Plaintiff also seeks further orders in part to ensure that the mareva order effectively achieves its purpose.

One of the preconditions for making a mareva order is that the Plaintiff must show to the required standard that it has a case. The minimum required standard of proof of the Plaintiff's claim is now accepted as being a good arguable case.

In Barclay-Johnson –v- Yuill [1980] 1WLR 1259 at page 1265 Sir Robert Megarry V-C stated:

"The Plaintiff must establish his claim with sufficient particularity, and show a good arguable case, though he need not demonstrate that his case is strong enough to entitle him to (summary) judgment."

In determining whether the Plaintiff has a good arguable case, the Court will look at the claim that is indorsed with the Writ and at the material in the supporting affidavit.

On 10 July 2009 the Plaintiff filed a Writ of Summons dated 9 July 2009 with an indorsement of its claim. Order 6 Rule 2 states that such an indorsement must contain a concise statement of the nature of the claim made or the relief or remedy required. In the case of a debt or liquidated demand there must be a statement of the amount claimed in respect of the debt or demand. Where the claim arises out of an agreement, the indorsement should state whether the agreement was oral or written, the date, the parties and the nature of the claim and/or the relief or remedy. If the claim arises out of tort, then the indorsement must state the date and place of the occurrence and the nature of the tort alleged. (The Supreme Court Practice 1991 Volume 1 paragraph 6/2/2).

In the indorsement of its claim, the Plaintiff claims that the Defendant defrauded the Company and misappropriated its assets. The Plaintiff also claims the sum of $2781.39 being the balance owing to the Plaintiff as a result of a personal loan made to the Defendant by the Plaintiff.

The word "defrauded" is the verb form of the noun fraud. In effect the Plaintiff is alleging that the Defendant has committed a fraud. The Plaintiff also alleges, in the same sentence, that the Defendant has misappropriated its assets. The words "defrauded" and "misappropriated" do not of themselves give rise to recognised causes of action in tort. The words used by the Plaintiff are more commonly found in criminal law in relation to crimes of dishonesty. Although the same act or omission may be both a crime and a civil wrong, it is still necessary for a plaintiff to establish that the claim comes within a cause of action available in respect of a breach of duty or contravention of right imposed or conferred by law.

The cause of action known as deceit is maintainable for damages on proof (a) that the alleged representation consisted of something said, written or done which amounted in law to a representation; (b) that the defendant was the person who made the representation; (c) that the Plaintiff was the person to whom the representation was made; (d) that the representation was false; (e) that the Plaintiff was induced by the representation; (f) that the representation was material; (g) that the Plaintiff altered its position; (h) that fraud resulted and (i) that damage was suffered. (see Halsbury's Laws of England 4th Edition Volume 45 paragraph 1275).

The cause of action of conversion requires a positive wrongful act of dealing with the goods in a manner inconsistent with the owner's rights and an intention in so doing to deny the owner's rights or to assert a right inconsistent with them. It may also arise where goods are wrongfully detained by the defendant after the plaintiff made a demand for the return of the goods. (See Halsbury's (ibid) at paragraph 1422).

It would have been open to the Plaintiff to claim that the alleged acts committed by the Defendant amounted to a breach or breaches of the express and/or implied terms of the Defendant's contract of employment. However, this has not been done.

As a result, I have some doubt as to whether the Plaintiff's indorsement that the Defendant defrauded the Plaintiff and misappropriated its assets complies with Order 6 Rule 2 of the High Court Rules. In my opinion the indorsement does not identify the nature of the tort nor has the plaintiff provided sufficient details as to when or where the acts are alleged to have occurred.

However, in the event that I am not correct on this point, I shall later in this decision consider whether the material in the Plaintiff's supporting affidavit establishes that it has a good arguable case.

So far as the debt, as an amount owing on a personal loan is concerned, it is clear that the Plaintiff relies upon a breach by the Defendant of an agreement between the parties. However there are no other details provided in the indorsement.

In support of its contention that it has a good arguable case, the Plaintiff relies on the material in the supporting affidavit.

I am satisfied that in relation to the claim for $2781.39 the Plaintiff has established that it does have a good arguable case. Paragraph 13 of the supporting affidavit makes a brief reference to the claim without setting out any details as to its terms and conditions. However the Defendant in his answering affidavit in paragraph 15 has admitted the contents of paragraph 13 of the Plaintiff's supporting affidavit.

The material in paragraph 7 of the supporting affidavit purports to support the allegations contained in the indorsement that the Defendant has defrauded the Plaintiff and misappropriated its assets.

Paragraph 7 (1) of the supporting affidavit alleges that the Defendant had raised several purchase orders for materials/goods which were unauthorised by the Plaintiff and for which payment had been made to 3rd parties. However, no copies of these unauthorised purchase orders alleged to have been raised by the Defendant have been produced. There is no indication as to what amount has been paid by the Plaintiff in respect of the alleged unauthorised purchase orders, nor to whom those payments have been made.

Paragraph 7 (ii) alleges that present value of the unauthorised materials/goods purchased on behalf of the Plaintiff is $48,215.95. The deponent goes on to state that this amount is expected to increase as investigations continue. The affidavit does not indicate how much of that amount can be attributed to the unauthorised activities of the Defendant. The affidavit does not state how much of that amount has to date been paid by the Plaintiff.

Annexed to the affidavit and purportedly in support of paragraph 7 (ii) is a copy of a summary compiled by the Plaintiff, presumably from original or copy purchase orders and other documents, none of which have been produced to the Court.

However, the material that is set out in Annex A is sufficient to demonstrate that there were irregularities in the manner in which supplies and materials were either requested or authorised by the Defendant. Some of those irregularities that involved the Defendant appear to have resulted in financial loss to the Plaintiff.

Paragraph 7 (iii) claims that the Defendant operated a fuel card account under his name that was not authorised by the Plaintiff. Paragraph 7 (iv) states that the fuel was used for the Defendant's personal vehicle. It is claimed that the fuel usage amounted to $5541.42.

The affidavit does not give any details as to the card number of the card operated by the Defendant, nor are there any details concerning the Defendant's private vehicle.

In support of the allegation, the Plaintiff relies on two copy tax invoices from BP South-West Pacific Limited for the period 31 August 2007 to 27 September 2007 and 31 October 2007 to 29 November 2007.

In both cases, the invoice is addressed to the Plaintiff company.

The material does not support all the allegations contained in paragraphs 7 (iii) and (iv). However the material does establish that the Defendant on two occasions purchased diesel and on one occasion zoom and lubricants using the same fuel card that was apparently issued in his own name. The material shows that vouchers were provided to make the purchases. The total of the transactions was about $1027.00.

The allegations contained in paragraphs 7 (v) and (vi) are supported by invoices for the amounts claimed in the sum of $312 and $308 respectively. They are relatively small amounts that do not add a great deal to the Plaintiff's application.

The issue for me at this stage is to assess the affidavit material and to determine whether that material is sufficient to conclude that the Plaintiff has a good arguable case.

Having considered the affidavit material as a whole I have concluded that the Plaintiff has shown that it has a good arguable case. The irregularities support the claim that the Defendant has defrauded the Plaintiff and misappropriated its assets to the required minimum standard.

However the Plaintiff's application for a mareva order faces a more substantial hurdle on the question of assets. The Plaintiff must establish that there is a danger of removal of assets from the jurisdiction or dissipation of assets needed to meet any judgment that the Plaintiff might obtain. This is the essential purpose of the order and is based on the premis that the Court has the jurisdiction to prevent the frustration of its process by taking steps to ensure that its judgments are not made valueless or reduced in value.

The Plaintiff's supporting affidavit is vague in relation to the assets that may be available to the Defendant. A simple assertion that the defendant is likely to place assets (that are not identified) beyond the Plaintiff's reach is not sufficient.

In his affidavit the defendant has stated in paragraph 13 that he has only two bank accounts with small balances in each. In paragraph 19 he denies owning any other assets. This material was not contradicted by the Plaintiff.

Therefore the Plaintiff has failed to show that there is a danger of assets being removed or dissipated, as the Plaintiff has failed to establish the existence of assets. The application for a mareva order must fail.

The Plaintiff also moves for the issue of a Writ of Ne Exeat Civitate which is the equivalent in Fiji of the writ Ne Exeat Regno. This remedy is derived from the inherent jurisdiction of the Court pursuant to section 18 of the High Court Act Cap 13 (as amended).

It is clear from the authorities that the writ Ne Exeat Regno predates the developments in the law that resulted in the evolution of the mareva and ancillary orders.

It is also clear that the writ Ne Exeat Regno exists independently of the ancillary remedy that have evolved in support of the Mareva jurisdiction. In Bayer AG –v- Winter and Others (Supra) the Court of Appeal held that a restraining order could be made in support of a mareva order even though the writ Ne Exeat Regno was not available. As a result, there would be no reason why the much older remedy provided by the Writ could not be granted when a mareva order was not available.

The circumstances under which the Writ may issue were discussed in Glover –v- Walters [1950] HCA 1; (1950) 80 CLR 172. At page 172 Dixon J (as he then was) stated:

"It is a prerogative writ used for the purpose of preventing a subject quitting the country without giving bail or security to answer a money claim of an equitable nature. ...

And at page 173:

"The Writ is not issued except for an equitable debt or demand. There must be a sum certain to be indorsed upon the writ as that for which bail is to be taken. .... For a legal debt the Plaintiffs must rely upon mesne process or the statutory provisions for holding to bail in jurisdictions where these remedies exist ...."

(In Fiji this is a reference to section 6 of the Debtors Act Cap 32).

"The Plaintiff to obtain the writ must show that he has such an equitable claim, that the defendant is about to depart beyond the seas and either that he is doing so to avoid the jurisdiction or that the debt will be endangered, or, at all events, that the remedy for its recovery will be prejudiced."

In view of the affidavit material I have concluded that the Plaintiff has not shown the existence of the conditions that are necessary for the issue of the writ. There are two reasons for this conclusion.

First, the only certain amount that is indorsed on the Writ is the amount of $2781.39 that is claimed to be owing by way of a personal loan. Although not expressly stated, it can be implied that the loan was made by an agreement between the parties. It may also be simply a claim for money had and received. It is however a debt that the Plaintiff can sue at law. It is not an equitable demand.

Secondly, the Plaintiff has not satisfied me that the defendant is leaving Fiji in order to avoid the jurisdiction or that the Plaintiff's claim will be endangered or prejudiced. The defendant says that he is going to New Zealand to work as he has been granted a work permit by the New Zealand Government and to reside there for that purpose with his wife. It is a work permit that expires in February 2010. His wife has also been granted a work permit that expires in February 2010.

The plaintiff says that the Defendant should remain in Fiji in order to answer allegations that will be ultimately put to him. The Plaintiff says that its investigations may take a minimum of 12 to 14 weeks. The Plaintiff also states that it will not be able to recover monies or assets of the Defendant leaves the country. The Plaintiff however does not give any reasons for that conclusion. These matters are not strictly relevant to the present application. The material in the Plaintiff's affidavit is inadequate and discloses insufficient grounds to justify issuing the writ.
In Glover v. Walters (supra) the Judge went on to conclude his observations at page 176 by stating:

These authorities show that the writ is not to be issued except with care and where real ground appears for believing that the defendant is seeking to avoid the jurisdiction or for apprehending that if the defendant is allowed to depart the Plaintiff will lose his debt or be prejudiced in his remedy."

In the present case I have concluded the Plaintiff has not shown sufficiently strong grounds for apprehending that it will lose its debt or be prejudiced in its remedy if the Defendant is allowed to leave Fiji. I am satisfied that the Defendant is leaving Fiji to take up employment in accordance with a work permit that expires on 5 February 2010.

Finally, one of the authorities relied upon by the Plaintiff was the Fiji High Court decision Westpac Banking Corporation –v- Satish Chandra (unreported Civil Action No. 356 of 1991 delivered 2 August 1991). In that case Scott J granted a mareva order and the prerogative writ Ne Exeat Civitate. The Judge was satisfied that the required conditions for the writ to issue were present. He did so on the basis that the mareva order provided the equitable foundation. He also indicated that he was exercising his discretion for the writ to issue on the basis that without the issuance of the writ the purpose of the mareva order would be nullified.

In the present case, as I have already determined that it is not appropriate to make a mareva order, there is no foundation for the issuance of the writ such as was relied upon by Scott J.

The Plaintiff also moves for an injunction to restrain the Defendant from leaving the jurisdiction until the determination of the within proceedings. The Plaintiff submitted that this was an application under Order 29 of the High Court Rules for an interlocutory injunction.
In this case, the Defendant has admitted in his affidavit that he does owe to the Plaintiff the sum of $2781.39. The defendant has not taken issue with the assertion that the amount is owing under an agreement for a personal loan made to the Defendant by the Plaintiff.

In his affidavit the Defendant makes no effort to explain why he has not paid the amount owing. He has given no details concerning any financial difficulty he may be facing. Perhaps. More importantly he does not indicate any intention to repay the debt which he has acknowledged.

Under the circumstances the balance of convenience dictates that the Court should come to the assistance of the Plaintiff to ensure that the defendant does not leave the jurisdiction leaving the Plaintiff unpaid.

Therefore I consider it appropriate to grant an injunction restraining the defendant from leaving the jurisdiction and to deliver his passport to the Chief Registrar. This interim injunction is to remain in force until the following two conditions have been met by the Defendant. First, the Defendant is to provide the Plaintiff with a full statement of assets owned by him and owned jointly by him both within and outside the jurisdiction of the Court. Secondly, the Defendant is required to provide security in the sum of $2781.39 by way of surety or bond to the Chief Registrar.

The costs of the application are costs in the cause.

W D Calanchini
JUDGE

12 August 2009
At Suva