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Umaria v Umaria Holdings Ltd [2012] FJHC 1377; Civil Appeal 25 of 2011 (18 October 2012)

IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION

Civil Appeal No. 25 of 2011

BETWEEN:

Jayanti Umaria
Appellant

AND:

Umaria Holdings Limited
Respondent

Counsel: Mr S. Nandan for the appellant
Mr R. Naidu for the respondent

Date of hearing: 17th May, 2012

JUDGMENT

1. This is an application by the appellant for a stay order pending appeal.
   

Upon an application made under section 169 of the Land Transfer Act, Master Amaratunga had granted vacant possession of the property occupied by the appellant to the respondent. On 18th April, 2012, I dismissed the appeal made to this court, from the judgment of Master Amaratunga .

The appellant, in his affidavit in support for the stay order, states as follows:

1. his appeal will be rendered nugatory, if the respondent is granted immediate vacant possession of the property.
   
2. he is willing to pay the rent and that the balance of convenience lies in granting stay of maintaining the status quo.
   

100. he has good prospects of success on this matter, as set out in his notice and grounds of appeal.
     

2. The hearing
   

At the hearing, counsel for the appellant, Mr Nandan submitted that the existence of a constructive trust enables the appellant to remain in possession of the property .It was argued further that this appeal will be rendered nugatory, if the respondent is granted immediate vacant possession of the property and that the only prejudice that would be caused to the respondent is loss of rental income, which would be negated, since the appellant is willing to pay rent. The balance of convenience, it was submitted, lies in favour of granting the stay.

Counsel for the respondent, Mr Naidu's response to the argument advanced by Mr Nandan, was that the appellant was in a position to pay damages. He submitted further that the prejudice caused to the respondent was that arrears of rent had not been paid for almost two years, and this, the appellant was not willing to pay. The eviction proceedings were instituted. since the appellant had stopped paying rent. Finally, Mr Naidu submitted that the proposed grounds of appeal have no prospects of success.

3. The proposed grounds of appeal
   

The appellant's proposed grounds of appeal are as follows, that:-

(1) the Learned Judge erred in law and in fact in holding that the Master was correct in concluding that the appellant had alleged constructive trust and failed to describe it satisfactorily.

(2) the Learned Judge erred in law and in fact in failing to hold that the issue of constructive trust could only have been determined by viva voce evidence given the circumstances of this matter.

4. The determination
   

The law on stay pending appeal was stated by His Lordship Chief Justice Gates in Native Land Trust Board v Shanti Lal,(2012 ) FJSC 1; CBV0009.11 (20 January, 2012) as follows:

" The court considering a stay should take into account the following questions. They were the principles set out by the Court of Appeal and approved subsequently and applied frequently in this court. They were summarised in Natural Waters of Viti Ltd v Crystal Clear Mineral Water (Fiji) Ltd,Civil Appeal ABU0011.04S 18th March 2005. They are:

(a) Whether, if no stay is granted, the applicant's right of appeal will be rendered nugatory (this is not determinative). See Phillip Morris (NZ) 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 bond 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.

(emphasis added)

In Chandrika Prasad v Republic of Fiji,(No 5), (2000) 2 FLR 115, Gates J (as he then was) referred to the following cases:

"It is well known that the litigant once successful should not lightly be deprived of the fruits of his successful litigation: The Annot Lyle [1886] UKLawRpPro 31; (1886) 11 P D 114 at 116CA; Monk v. Bartram, (1891) 1 OB 346. The power of the Court to grant a stay is discretionary: The Attorney-General v. Emerson & Others (1890) 24 OBD 56; and it is all unfettered discretion Winchester Cigarette Machinery Ltd. v. Payne and Anor. (No. 2) (1993) TLR-64-at648.

The phrase "nugatory" was used by the Court of Appeal in Wilson v. Church [1879] UKLawRpCh 233; [1879] 12 Ch. D 454. The head note summarises the position taken by Cotton and Brett LJJs:

"Where an unsuccessful party is exercising an unrestricted right to appeal, it is the duty of the Court in ordinary cases to make such order for staying proceedings under the judgment appealed from as will prevent the appeal, if successful, from being nugatory. But the Court will not interfere if the appeal appears not to be bona fide, or there are other sufficient exceptional circumstances". (emphasis added)

The Court of Appeal in Attorney-General of Fiji and Minister of Health v Loraine Die (unreported Misc. No 13 of 2010 delivered on 17 February, 2011) stated:

"The most important consideration in respect of whether a stay of execution should be granted is whether there are strong grounds of the proposed appeal:.. That hurdle is higher than that of chances of success for considering whether leave to appeal should be granted." (emphasis added)

The appellant's first proposed ground of appeal is that I had held, that the Master was correct .in concluding that the appellant had alleged constructive trust and failed to describe it satisfactorily.

The submissions filed in support of the stay, provides that the existence of a constructive trust enables the appellant to remain in possession of the property. The submissions proceed to state that given that the appellant and the managing director of the respondent company are "related" and that the appellant and the members of the respondent company have been living in properties owned by the respondent, a "constructive trust" could exist". This, it is stated further, could only be determined by examination of viva voce evidence by the parties.

In this regard, Master Amaratunga, had at the commencement of his Ruling, had held that it was "contrary to the accepted legal norms in company law" to allege constructive trust, being a minority shareholder of the company. Mr Naidu referred to Ten Pin Properties Ltd v Bolwlarama(N.Z)Ltd,(1989) High Court of NZ, where Tipping J stated that:

"(it is a) well established rule that a shareholder has no proprietary interest, either legal or equitable, in the assets of the company in which the shares are held in respect of which he holds his shares".

The second proposed ground of appeal is that, I erred in failing to hold that the issue of constructive trust could only have been determined by viva voce evidence. I found that no application had been made in this regard by the appellant at the hearing before Master Amaratunga. Justice Marsack in Paul Nagaiya v James Subhaiya, 15 FLR 212 at page 216 stated that "if is sought to establish that the registered proprietor is in fact holding as trustee then, in my view, there must be cogent and compelling evidence of the existence of such a trust".

I am not satisfied that the proposed grounds of appeal demonstrate an arguable case.

5. Orders
   

For the aforesaid reasons, after considering the submissions advanced by counsel and the principles governing an application of this nature, in the exercise of my discretion, I do not consider this to be a proper case to grant the stay sought, pending the hearing and determination of the proposed appeal.

The appellant's application for stay is dismissed with costs summarily assessed in a sum of $ 1500 payable by the appellant to the respondent, within 14 days of this judgment. The appellant is ordered to grant the respondent possession of the property occupied by him, within 14 days of this Order.

18th October, 2012

A.L.B. Brito- Mutunayagam
Judge