IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION HBC 292 OF 2010

BETWEEN:

CHANDRA SUPERMARKET LIMITED
First Plaintiff

AND:

CHANDRA KALA KUMAR
Second Plaintiff

AND:

ALVIN AVINESH KUMAR
Third Plaintiff

AND:

J SANTA RAM (STORES) LIMITED
First Defendant

AND:

SUBHASH CHANDRA
Second Defendant

Mr R K Naidu for the Plaintiffs
Mr J Udit for the First Defendant

DECISION

On 6 October 2010 I granted ex parte to the Plaintiffs an interim injunction in the following terms:

"1. (i) An order that the 1st and 2nd defendants, their servants and or agents do forthwith let the 1st plaintiff and the 2nd plaintiff and her family have occupation of the premises occupied by the plaintiffs as a tenant including but not restricting to the shop, bakery, residence and the power generator area or any part thereof situated in Naqara, Taveuni until further order of this Court;

 (ii) An Order restraining the 1st and 2nd defendants, their servants and or agents from preventing the 1st plaintiff and the 2nd plaintiff and her family from entering and occupying the shop, bakery, residence and the power generator area or any part thereof situated in Naqara, Taveuni until further order of this Court;

 (iii) The 1st and 2nd defendants, their servants and or agents do vacate and depart from the premises occupied by the 1st plaintiff as a tenant including but not restricting to the shop, bakery, residence and the power generator are or any part thereof situated in Naqara, Taveuni, until further order of this Court;

(iv) An interim order that the 1st and 2nd defendants be restrained whether by themselves and or by their servants and or agents or otherwise howsoever from holding any auction of the goods of the plaintiffs and or from selling or from dealing with the goods of the plaintiffs until further order of this Court;

(v) An interim order that the defendants be restrained whether by themselves and or by their servants or agents and or otherwise howsoever from interfering with the plaintiffs quite enjoyment and occupation of the premises including but not restricting to the shop, bakery, residence and the power generator area or any part therefore of until further order of this Court;

(vi) An order that the police officers in Taveuni do act and render all assistance required by the plaintiffs in the execution of this order."

These orders were in terms of the ex parte application dated 5 October 2010.

The further hearing of the application was adjourned to 14 October 2010 and I directed that the Defendants be served with the papers no later than 8 October 2010.

On 14 October 2010 the application proceeded inter partes. On that day I gave directions for the filing of further affidavit material. The application was adjourned to 29 November 2010 and the interim orders were extended to that date.

On 29 November 2010 the parties presented submissions and the hearing was completed the following day. At the conclusion of submissions I indicated to Counsel that I needed time to consider the material set out in the affidavits and that a decision would be handed down on notice. I made interim orders pending the handing down of the decision.

This case is about a commercial lease of premises situated at Naqara on Taveuni Island. It would appear that the First Plaintiff entered into occupation of the premises in about January 2008 pursuant to an agreement with the Second Defendant. Some time later the Second Defendant fell into financial difficulty. The Fiji Development Bank as mortgagee advertised the premises by way of tender in 2009. The First Plaintiff was directed by letter dated 9 April 2009 to make rental payments to the Bank until further notice. Then by letter dated 4 January 2010 the First Plaintiff was directed to make further rental payments to the Official Receiver.

The leasing arrangement between the Official Receiver as registered proprietor and landlord on the one part and the First Plaintiff as tenant on the other part was formalised in a written tenancy agreement dated 16 February 2010. Under this agreement the term of the lease was for three years from the date of the agreement with an option for renewal thereafter. The rent was $3000.00 per month excluding electricity and was payable at the landlord's Suva office on a monthly basis made in advance between the 15th and the last day of each month.

It appears not to be disputed that the First Defendant acquired the premises from the mortgagee Fiji Development Bank on 30 June 2010. The First Plaintiff admitted in its affidavit in support that it had been advised in July 2010 that this was the position with a direction to make future rental payments to the First Defendant.

It would also appear that it is not disputed that Mr and Mrs Santa Ram visited the premises in about the middle of July 2010 and had a discussion with Mr and Mrs Kumar. The contents of that discussion are disputed and it is that difference which has in part resulted in the present proceeding. It is claimed by the First Defendant that there was an agreement reached that the new rent was to be $5500 per month plus VAT. The Plaintiffs maintain that the rent was to remain at $3000.00 per month. There are also issues concerning the payment of a water bill and a dishonoured cheque.

The premises consist of a business and a residence. The upstairs is the residence or home of the second and third Plaintiffs and their families. The downstairs consists of a grocery shop, bakery and a fast food takeaway shop. The business was closed and the residence vacated on 4 October 2010 as a result of the First Defendant's actions.

In early October the First Defendant had arranged for the forceful eviction of the Plaintiffs from the premises and it was claimed that the First Defendant proposed to sell the property, stock and belongings of the Plaintiffs.

Filed with the ex parte application for interim orders was a Writ of Summons dated 6 October 2010 indorsed with claims seeking possession of the premises, injunctions restraining the Defendants from preventing the Plaintiff from entering and occupying the premises and from interfering with the Plaintiff's quiet enjoyment of the premises, a declaration that the First Defendant's distress action was unlawful or alternatively relief from forfeiture and damages under various heads.

Although there is some uncertainty as to the terms and conditions of the present agreement between the parties, these proceedings cannot in any way be taken as an impediment to the landlord exercising a right that may exist under the agreement to terminate the lease without reason upon giving the prescribed notice to the tenants. It was also brought to my attention that there are proceedings already on foot arising out of the same dispute.

In support of the application for interim relief the Plaintiffs filed an affidavit sworn by Archana Kumar on 5 October 2010. The First Defendant filed an answering affidavit sworn by Santa Ram on 13 October 2010. The Plaintiffs filed a reply affidavit sworn by Chandra Kala Kumar on 21 October 2010.

The Plaintiffs filed a Statement of Claim on 13 October 2010. The Defendants have not yet filed a Defence.

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] AC 396. First, the Plaintiffs are required to establish that their claim raises a serious question to be tried. The Plaintiffs are not required to establish a prima facie case that they will gain a permanent injunction after 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 tenancy agreement following the First Defendant's acquisition of the premises, whether there are rental payments outstanding and if so, how much is owing, the remedies available to a landlord upon non-payment of rent under statute, issues arising as a result of the eviction of the Plaintiffs from the premises and issues of assault and trespass.

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 deal with at the trial."

His Lordship at page 409 continued on the same point by adding:

"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 & 11A of 2004 delivered 26 November 2004). 

In the course of submissions I was referred to the decision of Shipbuilding (Fiji) Limited –v- Brian Murphy and Sail Tahitian's Shipbuilders (1997) 43 FLR 83 and in particular to the learned judge's observations at page 89 (E). However, it must not be forgotten that the present application is an inter partes application for an injunction that was initially commenced and granted ex parte. It is now an application by the Plaintiffs for the injunction to continue in force until the completion of the trial or until otherwise ordered by this Court. The latter may occur in the event that an application were to be made by the First Defendant to have discharged or dissolved any injunction which may be granted by the Court. In such a case the observations of the learned judge in Shipbuilding (Fiji) Limited (supra) may well be appropriate.

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 Plaintiffs. If damages would be an adequate remedy and the First 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 Plaintiffs' claim. 

Whilst some elements of the Plaintiffs' damage may be adequately compensated by an award of damages, there are other elements, such as the loss of goodwill in respect of each business, the loss of their home and consequential hardship, which, in my opinion, cannot be adequately compensated by an award of damages. The difficulty in calculating damages for the Plaintiffs works against the First Defendant's submission that damages will be adequate compensation. I am satisfied that an award damages alone would not be an adequate remedy in the event that the Plaintiffs were successful at the trial.

Associated with the issue of the adequacy of damages as a remedy, is the issue of the Plaintiffs 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 Plaintiffs' 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 Plaintiffs' undertaking as to damages was set out in paragraph 39 of the affidavit sworn by Archana Kumar who deposes that she is a director of the First Plaintiff. That paragraph provides:

"39 I undertake that, if by reason of the making of the interim order so sought, the defendant sustains damages (being damages which in the opinion of the court, I ought to pay) I will abide by any order which the court may make in respect of those damages. The Plaintiff has a substantial supermarket business. The Plaintiff owns a Suzuki Vitara registration number EV434."

There was no further information provided in the affidavit and nor was there any material exhibited to her affidavit to indicate to the court the value or worth of the undertaking. Although the undertaking may be regarded as a personal undertaking, there was no material to fortify that personal undertaking.

In paragraph 33 of the Reply affidavit filed on 21 October 2010 the Second Plaintiff, who is also a director of the First Plaintiff, deposed that:

"33 My husband and I jointly own a freehold property in Nausori. As at 10 July 2009 our property was valued at $115,000.00. …."

A copy of the title and a copy of the valuation were exhibited to the affidavit. The copy certificate of title (No 18485) indicates that the Second Plaintiff and her husband became registered proprietors on 25 February 1998 of Lot 6 on Plan 4612 situated in Raralevu road. The certificate also indicates that a mortgage was taken by the Fiji Development Bank on 8 June 2004. There are two charges to the Commissioner of Inland Revenue registered on 15 and 23 October 2007.

The valuation dated 10 July 2009 was prepared by Independent Property Valuations Limited. It states that the value of the land was $25,000.00 and improvements were valued at $90,000.00.

There was no evidence before me to suggest that the First Defendant intended to do otherwise than to sell the Plaintiffs chattels to seek to recover rent in dispute and to relet the premises. Since the hearing of the application on 30 November 2010 the Plaintiffs have been paying rent, albeit at the lower amount of $3000 rather than $5500.

Since the Second Plaintiff is a director of the First Plaintiff and since both deponents have sworn affidavits that depose, amongst other things, to the issue of the undertaking as to damages, it is my opinion that the undertakings are equivalent to personal undertakings given on behalf of the First Plaintiff. This is to be taken into account in considering whether the First Defendant would be compensated in the event that the Plaintiffs are unsuccessful. On balance I am satisfied that the undertaking is sufficient.

Having concluded that damages would not be an adequate remedy for the Plaintiffs and having considered the issue of the undertaking as to damages it is necessary to have regard to other considerations under the heading of the balance of convenience.

In American Cyanamid (supra) Lord Diplock at page 408 said:

"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 Plaintiffs being permitted to remain in possession and to continue to trade the business of a grocery store, bakery and fast food takeaway shop. Hence, the reference in this case to the status quo is a reference to the position that existed between 2008 and early October 2010. It is not a reference to the situation that arose on 4 October 2010 as a result of the actions of the First Defendant.

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 Plaintiffs' case which may assist in determining where the balance lies.

If the interim orders are granted and the Plaintiffs ultimately fail then the First Defendant will be entitled to retake possession of the premises. There will be a shortfall owing to it. On the other hand, if the injunctions are not granted the First Plaintiff will at this stage lose the business and the Plaintiffs and/or their families lose their current residence.

Taking account of the consequences for the Plaintiffs if the injunction is not granted against the consequences to the First Defendant if the injunction is granted I have concluded that the balance of convenience favours the Plaintiffs.

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 he then was) stated:

"Whether there is a serious question to be tried and the balance of convenience are two broad questions providing an accepted framework 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 considerations 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 both the written and oral 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.

I make the following orders:

1.	That until judgment in the action or further order in the meantime the ex parte orders 1(i) – (vi) granted on 6 October 2010 remain in force on the following terms:

(a)	That the Plaintiffs make monthly rental payments of $3000.00 to the First Defendant on the first day of each month into the nominated bank account of the First Defendant.

(b)	That the Plaintiffs, its servants and or agents desist from in any way damaging the said premises during the period of occupancy permitted by this injunction.

2.	The costs of this application are to be on a party and party (i.e. standard) basis as costs in the cause.

W D Calanchini
JUDGE

21 January 2011
At Suva