|
|
Home
| Databases
| WorldLII
| Search
| Feedback
High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
CIVIL ACTION HBC 277 OF 2010
BETWEEN:
SATYA NAND
t/a ALESH ENTERPRISES
Plaintiff
AND:
RAJENDRA PRASAD
First Defendant
AND:
JEREMAIA VUNISA
Second Defendant
Mr R Chaudhary for the Plaintiff
Mr S Singh for the First Defendant
DECISION
By ex parte Notice of Motion dated 15 September 2010 the Plaintiff applied for the following interlocutory injunctions:
(a) AN INJUNCTION restraining the Defendant by himself, his servants, agents and/or whosoever from preventing, interfering and/or restraining the Plaintiff and/or his servants, agents, invitees, customers and whosoever from entering or having unrestricted access to all that piece and parcel of land comprised in CT 10916, situated at 2 Daya Street, Vatuwaqa, Suva more particularly being Shop 2 trading under the name and style of Alesh Enterprises until the final determination of this action or further order of this Honourable Court.
(b) A MANDATORY INJUNCTION permitting the Plaintiff and/or his servants, agents, invitees, customers and whosoever to enter and/or to have unrestricted access to all that piece and parcel of land comprised in CT 10916, situated at 2 Daya Street, Vatuwaqa, Suva more particularly being Shop 2 trading under the name and style of Alesh Enterprises until the final determination of this action or further order of this Honourable Court.
(c) AN INJUNCTION restraining the 1st Defendant, his servants, agents and/or whosoever from directing the bailiff, the 2nd Defendant therein, namely Jeremaia Vunisa from proceeding with the levying of the distress of rent under Distress of Rents Act (Cap 36) on the property more particularly described as CT 10916, situated at 2 Daya Street, Vatuwaqa, Suva being Shop 2 trading under the name and style of Alesh Enterprises until the final determination of this action or further order of this Honourable Court.
(d) AN INJUNCTION restraining the 2nd Defendant, his servants, agents and/or whosoever from proceeding with the levying of the distress of rent under the Distress of Rents Act (Cap 36) on the property more particularly described as CT 10916, situated at 2 Daya Street, Vatuwaqa, Suva being Shop 2 trading under the name and style of Alesh Enterprises until the final determination of this action or further order of this Honourable Court.
The application was supported by an affidavit sworn by Satya Nand on 14 September 2010. The application was initially listed for mention on 24 September 2010 and I had directed that it proceed inter partes.
The Plaintiff then filed a second ex parte Notice of Motion dated 22 September 2010 seeking injunctive relief in terms that replicated the relief sought in the original Notice of Motion. The second Notice of Motion was supported by an affidavit sworn by Gyaneshwari Ram on 22 September 2010. Exhibited to that affidavit was a copy of a newspaper advertisement that indicated that an auction under the Distress of Rent Act was to take place on 23 September 2010 at 10.00am at the shop at 2 Daya Street Vatuwaqa, Suva.
Consequently the application was listed before me as a matter of urgency on 22 September 2010 at 4.00pm. After hearing Counsel I granted interim relief in terms of the orders sought pursuant to Order 29 Rule 1 (2) (as amended) of the High Court Rules. I adjourned the further hearing of the application to 30 September 2010 to proceed on that day as an inter partes application.
Due to the urgency of the application the Plaintiff had not filed a Writ of Summons with the Notice as was the usual practice. In accordance with Order 29 Rule 1 (3) I ordered that the Plaintiff file a writ for issuing by 10.00am on 23 September 2010.
A writ was issued out of the Court on 23 September 2010. Annexed to the writ was the Plaintiff's Statement of Claim. Although there is no proof of service of the Writ and the Statement of Claim, I was informed by Counsel for the Plaintiff at the hearing of this application that the Writ and Statement of Claim had been served on the First Defendant shortly after it had been issued and by the end of September. Counsel for the First Defendant did not challenge that assertion. The First Defendant acknowledged service and filed a Defence on 3 February 2011.
The First Defendant filed an answering affidavit sworn by Rajendra Prasad on 29 September 2010. On 1 October 2010 I gave directions for the filing of further affidavit material. I also ordered the Plaintiff to make monthly rent payments in the sum of $1200 until further order. The Plaintiff subsequently filed a reply affidavit sworn by Satya Nand on 9 December 2010.
Counsel presented oral submissions on 3 February 2011. I reserved my decision and extended the interim orders that had been made on 22 September and 1 October 2010 until the decision was delivered.
The dispute between the parties arises out of a lease agreement in respect of premises described in CT 10916 and situated at 2 Daya Street Vatuwaqa. The lease was in respect of one of two shops located on the premises. The agreement had been an oral agreement made between the Plaintiff and the First Defendant. The monthly rental was $1200.00. The Plaintiff conducted a mini market business under the name Alesh Enterprises. He and his family resided at the rear of the premises. It would appear not to be disputed that the Plaintiff paid the agreed rent of $1200.00 per month up till 31 December 2009.
The material implies that the initial term was for five years. It appears not to be disputed that the parties entered into a renewal of lease agreement dated 17 October 2008 which was to take effect on and from 1 January 2010. In his Statement of Claim, the Plaintiff has not pleaded any of the express terms of the agreement. However in his supporting affidavit the Plaintiff has exhibited a copy of the document dated 17 October 2008. The document was in the form of a letter addressed to the Plaintiff and stated:
"This letter serves to formalise the agreement made by Mr Rajendra Prasad, Landlord of 2 Daya Street Vatuwaqa and Mr Satya Nand, Tenant and Manager of Alesh Enterprises also at 2 Daya Street Vatuwaqa.
The Agreements are as follows:
● To renew the lease for a further 5 (five years) effective from 1 January 2010 to 1 January 2015.
● The monthly rental of $2000 (Two thousand dollars) is to be paid on the 1st of each month.
● Any alteration in or outside the building/shop should first be approved by the Landlord."
● Small maintenance, painting, changing of bulbs etc are to be paid by the Tenant."
It is this agreement that has given rise to the dispute between the parties. The Plaintiff claims that the increase in rent from $1200.00 per month to $2000.00 per month with effect from 1 January 2010 was the amount that the Plaintiff would pay for the two shops. The Plaintiff claims that the Defendant was to deliver possession of the second shop on 1 January 2010. The second shop was a kava shop which was not connected to the Plaintiff's business. It was argued before me that there was no basis for the Defendant to increase the existing rent for one shop by $800.00 per month. It was also submitted that there was non-compliance with relevant legislation in the event that the Defendant claimed to be increasing the rent in respect of the one shop.
The Plaintiff submitted that as the second shop was not made available by the Defendant, he paid only $1200.00 for the months of January, February and March 2010. These payments were accepted by the Defendant who issued receipts in respect of the same.
It appears that the Defendant then started insisting on payments of $2000.00. The Plaintiff paid $850.00 in April. The second shop was not made available to the Plaintiff.
The Plaintiff did not make any further payment before the Defendant commenced distress action. By Notice dated 23 July 2010 the Defendant demanded payment of the balance of rent for April being $1150.00, rent for May, June and July at $2000.00 per month being a total of $6000.00 and costs in the sum of $800.00 being a total of $7950.00.
On the same day (23 July 2010) the Plaintiff attended at the office of the Defendant's legal practitioners. The Plaintiff signed an acknowledgment on that day which was witnessed by a Mr Suresh Chandra, a partner in the law firm acting for the Defendant. The Plaintiff acknowledged owing $7950.00 as per the Notice. He undertook to pay that amount and agreed that the rent was $2000.00.
The Plaintiff explained in his affidavit at paragraph 22 the reason why he signed the acknowledgment on that day. He stated in that paragraph that he signed under the threat that the shop would be closed immediately if he didn't sign. Although the First Defendant was not present, he stated in his answering affidavit that the Plaintiff voluntarily signed the Acknowledgment.
The Plaintiff paid and received a receipt dated 24.7.10 for $800.00 for costs, a receipt dated 29.7.10 for $2000.00 as part of the distress arrears, a receipt dated 9.8.10 for $500 and a receipt dated 2.9.10 for $2500.00. Apart from costs, the Plaintiff paid an amount $5000.00 up till 2 September 2010. If the rent was in fact only $1200.00 per month, then the Plaintiff owed $1350.00 to the Defendant as at 2 September 2010. In the event that the rent was $2000.00 per month from 1 January 2010 then the Plaintiff owed the Defendant $8550.00 as at 2 September 2010. If the first three months' rent was accepted by the Defendant at $1200 and thereafter at $2000.00 per month, then the Plaintiff owes the Defendant $6150.00 as at 2 September 2010.
It is interesting to note that the Defendant's demand did not claim any outstanding rent for the months of January, February and March 2010. He had accepted payment of rent of $1200.00 for those first three months of 2010.
By a further notice dated 6 September 2010 the Defendant demanded payment of $2150.00 (being default under the acknowledgment dated 23.7.10), $4000.00 (rent for August and September) and $750.00 (costs) being a total of $6900.00.
It was this demand that resulted in the subsequent advertisement of an auction sale of all stock and trade at the shop at 2 Daya Street on 23 September 2010 under the Distress for Rent Act Cap 36.
The shop was locked and the Plaintiff and his family evicted from the premises on 14 September 2010. This remained the position until I made interim ex parte orders on 22 September 2010.
In his Statement of claim the Plaintiff alleges that the Defendant has breached the implied term by failing to deliver the second shop to the Plaintiff on 1 January 2010. The Plaintiff alleges that the Defendant's demand for rent in the sum of $2000 from April 2010 is in breach of the agreement.
The Plaintiff also alleges that the Defendant is in breach of the Fair Rents Act Cap 269. The Plaintiff also claims that he signed the Acknowledgment under coercion and duress. He also claims that as a result of the First Defendant's wrongful claim for distress for rent, the Second Defendant committed a trespass.
In addition to the Permanent injunctions the Plaintiff claims damages, special damages and interest in his statement of claim.
The First Defendant claims that the second shop was never part of the renewal agreement. The renewal agreement contained a rent increase clause of $2000.00 per month with effect from 1 January 2010. The First Defendant submitted that the renewal agreement was an agreement in writing. There were no implied terms. The First Defendant claims that the Plaintiff signed the acknowledged voluntarily and as a result confirmed the contents of the renewal agreement.
The principles that should be applied in a case such as the present were clearly stated by Lord Diplock in American Cyanamid Ltd –v- Ethicon Ltd [1975] UKHL 1; [1975] AC 396. First, the Plaintiff is required to establish that his claim raises a serious question to be tried. The Plaintiff is not required to establish a prima facie case that he will gain a permanent injunction at the trial. The test requires the affidavit material to contain sufficiently precise factual supporting evidence to satisfy the court that the claim is not frivolous, vexatious or hopeless.
At this stage it is not necessary to go much further into the facts or the law of the substantive issues. I am satisfied that there are several serious issues of fact and law to be tried. They concern, amongst others, the terms of the renewal agreement, whether there are rental payments outstanding and if so, how much is owing, the application of the Fair Rents Act, the application of the Distress for Rent Act, the remedies available to a landlord upon non-payment of rent under statute, issues arising as a result of eviction of the Plaintiff and his family and the claim of trespass and whether the Plaintiff signed the "Acknowledgment" under duress.
I do not consider any of these issues to be frivolous. More significantly, they cannot be resolved simply by reference to the affidavits. The factual assertions made by the parties must be tested under oath by cross-examination. In American Cyanamid (supra) Lord Diplock made several observations on the role of the Court in an application such as is presently before me. In particular at page 406 His Lordship stated:
"In those cases where the legal rights of the parties depend upon facts that are in dispute between them, the evidence available to the Court at the hearing of an application for an interlocutory injunction is incomplete. It is given on affidavit and has not been tested by oral cross-examination."
Then at page 407 he continued:
"It is no part of the court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavits as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which may call for detailed argument and mature considerations. These are matters to be dealt with at the trial."
His Lordship at page 409 continued on the same issue and noted:
"The court is not justified in embarking upon anything resembling a trial of the action upon conflicting affidavits in order to evaluate the strength of either party's case."
On the issue of evaluation at the interlocutory stage he noted at page 410 that:
"In view of the fact that there are serious questions to be tried upon which the available evidence is incomplete, conflicting and untested, to express an opinion now as to the prospects of success of either party would only be embarrassing to the judge who will have eventually to try the case."
The Court of Appeal has indicated that the principles set out in American Cyanamid (supra) are the appropriate tests to be applied in Fiji in such applications: Natural Waters of Viti Limited –v- Crystal Clear Mineral Water (Fiji) Limited (unreported Civil Appeal No 11 and 11A of 2004 delivered 26 November 2004).
Having determined that there is a serious question to be tried, I must now consider whether the balance of convenience lies in favour of granting or refusing the application for interlocutory relief.
The first limb of this consideration is to ask whether damages would be an adequate remedy for the Plaintiff. If damages would be an adequate remedy and the Defendant was in a financial position to pay them, then an interlocutory injunction would not normally be granted, regardless of the apparent strength of the Plaintiff's case.
Whilst some elements of the Plaintiff's damage may be adequately compensated by an award of damages, there are other elements, such as the loss of goodwill in respect of the business, the loss of his residence and consequential hardship which, in my opinion, cannot be adequately compensated by an award of damages. This difficulty in calculating damages for the Plaintiff works against the First Defendant's submission that damages would be an adequate remedy.
I am satisfied that an award of damages alone would not be an adequate remedy in the event that the Plaintiff was successful at the trial.
Associated with the issue of the adequacy of damages, as a remedy, is the issue of the Plaintiff's undertaking as to damages. This issue arises in the event that the First Defendant succeeds at the trial in establishing his right to do that which was sought to be prevented. In those circumstances the question arises whether the First Defendant would be adequately compensated under the Plaintiff's undertaking as to damages for any loss sustained by being prevented from continuing his actions between the time of the application and the time of the trial.
The Plaintiff's undertaking as to damages was set out in paragraph 39 of his affidavit in support and states:
"39. I give an undertaking to damages which is supported by the following asset:
Methodist Church Residential Class Crown Lease 333618 being Lot 4 on DP 6759 at Davuilevu
- estimated value $40,000.00."
Annexed to the affidavit was a photocopy of the first page of the said lease.
Counsel for the First Defendant submitted that by itself the document did not sufficiently fortify the undertaking. More importantly he submitted that the Plaintiff had not made a full disclosure when he made his application.
Counsel for the First Defendant submitted a complete copy of the lease document. It showed that the lease was encumbered by two mortgages, one to the National Bank of Fiji dated 25.01.05 with two subsequent variations and one to the Fiji Development Bank dated 30.01.09. A further non-disclosure, it was submitted, was the Plaintiff's failure to state in the affidavit that the house on the leased land had been burnt down. Counsel submitted that the application for interlocutory injunctive protection should be dismissed as a result of such non-disclosures. He stated that equity principles dictated that the application must make full, complete and frank disclosures when seeking equitable relief at the discretion of the Court.
The affidavit material on this issue, as with other issues in dispute between the parties, consists of allegations and counter-allegations. The material in the affidavits and the submissions on this issue made by Counsel did not assist the court.
The law is well settled in Fiji that an applicant for interim injunctive relief who offers an undertaking as to damages must also proffer sufficient evidence of his financial position: Honeymoon Islands (Fiji) Ltd –v- Follies International Limited (unreported Civil Appeal No. 63 of 2007 delivered on 4 July 2008). As a result the Plaintiff in the present application was required to proffer sufficient evidence of his financial position. The sufficiency of that evidence was a relevant consideration in determining the value of the undertaking as to damages which in turn was a matter to be taken into account by the Court in deciding whether to exercise its discretion in favour of the applicant. Although the existence of the two mortgages was not disclosed, it may be assumed that the Plaintiff has continued to make the necessary payments. It was not submitted that either Bank was intending to proceed against the Plaintiff for default by way of a mortgagee sale. The inference could be drawn that since mortgage payments appear to be up to date, the Plaintiff has been gradually increasing his equity in the property.
Certainly, it may be argued that the non-disclosure was material. However, on the evidence before me I am not prepared to conclude that the non-disclosure was intended to mislead the Court. In Brink's-MAT Ltd –v- Elcombe and Others [1988] 3 All ER 188 the Court of Appeal discussed the issue of material non-disclosure and the consequences of such failure that appear to reflect a more relaxed approach. Ralph Gibson LJ at page 193 stated:
"Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues which were to be decided by the judge on the application. ....
Finally it is not for every omission that the injunction will be automatically discharged ... the court has a discretion, not withstanding proof of material non-disclosure which justifies or requires the immediate discharge of the ex parte order, nevertheless to continue the order, or to make a new order on terms ...."
Although there has been non-disclosure by the Plaintiff of both the existence of two mortgages and the dwelling on the property having been burnt down, I cannot say that the ex parte injunction would have been refused had that information been disclosed. Furthermore, even if the non-disclosure is regarded as material, in all the circumstances of the present case I do not consider that the undertaking was so inadequate as to conclude that I should not move on to consider the balance of convenience. I consider it appropriate in the circumstances of this case to proceed to consider the balance of convenience even if the undertaking as to damages has been tainted by a non-disclosure which may be regarded as material.
One factor I have taken into account in reaching this conclusion is that since October 2010 the Plaintiff has been paying the lower monthly rental amount of $1200.00 rather than $2000.00. I also note that the Defendant is being restrained from selling the Plaintiff's stock and trade as a going concern to recover the rental that is in dispute apparently from April 2010.
Having concluded that damages would not be an adequate remedy for the Plaintiff and having considered at length certain issues concerning the Plaintiff's undertaking as to damages, it is now necessary to have regard to other considerations under the heading of the balance of convenience.
A starting for those consideration is the comment made by Lord Diplock in American Cyanamid (supra) at page 408:
"Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo."
In the present case the status quo favours the Plaintiff being permitted to remain in possession and to continue to trade the business of a mini-supermarket. Hence the reference in this case to the status quo is a reference to the position that existed prior to 14 September 2010. It is not a reference to the situation that arose on 14 September 2010 as a result of the actions of the Defendants.
At this stage, in view of the conflicting affidavit material, it is not possible for the Court to form any useful views as to the apparent strength or weakness of the Plaintiff's case which may assist in determining where the balance lies.
If the interim orders are granted and the Plaintiff ultimately fails then the First Defendant will be entitled to take possession of the premises. There will be a shortfall owing to him. On the other hand, if the injunctions are not granted, the Plaintiff will at this stage lose the business and his family will lose their current residence.
Taking account of the consequences for the Plaintiff if the injunction is not granted against the consequences to the First Defendant if the injunctions are granted I have concluded that the balance of convenience favours the Plaintiff.
That, however, is not necessarily the end of the matter. In Klissers Farmhouse Bakeries Ltd –v- Harvest Bakeries Ltd [1985] 2 NZLR 140 at page 142 Cooke J (as then was) stated:
"Whether there is a serious question to be tried and the balance of convenience are two broad questions providing an accepted frame work for approaching these applications. As the NWL speeches ([1979] 1 WLR 1294) bring out the balance of convenience can have a very wide ambit. In any event the two heads are not exhaustive. Marshalling consideration under them is an aid to determining, as regards the grant or refusal of an interim injunction, where overall justice lies. In every case, the judge has finally to stand back and ask himself that question. At this final stage, if he has found the balance of convenience overwhelmingly or very clearly one way ... it will usually be right to be guided accordingly. But if, on the other hand, several considerations are still fairly evenly poised, regard to the relative strengths of the cases of the parties will usually be appropriate."
Having considered the affidavit material and the submissions presented by Counsel I have concluded that this is a case where the Court's discretion, taking into account the overall justice of the case, could be exercised in a way that minimises the disadvantage that may possibly be experienced by the First Defendant. In other words this is a case where conditions should attach to the orders that constitute the interlocutory injunction.
Before fixing those conditions I should comment on the issue of requiring the Plaintiff to pay into court an amount that constitutes the rent in dispute. This is a case that is not simply about disputed rent. The Plaintiff alleges that the increase in rent was for the leasing of a second shop. The second shop is currently a kava business that is leased to another tenant. The Defendant's assertion is that the increase in rent was for the one shop occupied by the Plaintiff and that the renewal agreement does not make any mention of a second shop. The Plaintiff claims that the parties understood that the rent increase was for the second shop and that it was implied in the written renewal agreement that the increased rent was for the second shop. The First Defendant says that the renewal agreement was a written agreement. However it is clear that certain terms must be implied to give the renewal agreement effect. The renewal agreement is silent as to whom the rent is to be paid, where it is to be paid and in what manner the rent is to be paid. It is silent as to how the renewed lease agreement may be terminated and under what circumstances. Alternatively the renewal agreement may be regarded as an oral agreement, some of the terms of which were evidenced in writing.
As a result it is necessary for the Court to determine the terms of the renewal agreement. It is under these circumstances inappropriate to order the Plaintiff to make a payment into Court.
A final comment needs to be made about the relationship of the parties. In paragraph 21 of his answering affidavit the First Defendant states that the Plaintiff is his brother-in-law. This is yet another case where the disputing parties in the litigation before the Court are members of an extended family. Such a situation is far too common in disputes coming before this court. The Courts should not be called upon to settle disputes between families members arising out of informal and incomplete arrangements made when families members were on better terms.
I make the following orders:
W D Calanchini
JUDGE
21 February 2011
At Suva
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/fj/cases/FJHC/2011/85.html