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New World Ltd v Vanualevu Hardware Fiji Ltd [2015] FJHC 957; Civil Action 45.2014 (4 December 2015)

In the High Court of Fiji at Suva
Civil Jurisdiction

Civil Action No. 45 of 2014

Between :

New World Limited
Plaintiff

And :

Vanua Levu Hardware Fiji Ltd
First defendant

And:

Bashir Khan
Second defendant

Appearances : Mr A.K. Narayan for the plaintiff
: Mr F. Haniff for the defendants

Date of hearing: 12 November, 2015

Judgment

1. The background
   
   • (a) The plaintiff filed statement of claim on 5th August, 2014, seeking a declaration that in terms of an agreement of 25th January, 2014, it is a tenant of the defendant for a period of 10 years with effect from 1st January,2014; an order that the defendants specifically perform the agreement; and an interim injunction restraining the defendant from interfering with the plaintiff's peaceful possession, access and egress of the demised premises.
     
   • (b) The defendant filed summons for a preliminary determination on the legality of the "purported new tenancy agreement" alleged by the plaintiff, in light of section 13 of the State Lands Act. On 3rd October,2014,order was made that the matter be determined as a preliminary issue.
     
   • (c) The hearing on the preliminary issue was before me. On 21st October, 2015, I held that "the purported agreement of 25th January 2014 described in paragraphs 4 and 5 of the statement of Claim" is null and void, in terms of section 13 of the State Land Act,(Cap 132) for want of written consent of the Director of Lands(DOL).
     
   • (d) Immediately after I delivered judgment, Mr Amrit Sen, counsel for the plaintiff on that occasion made an oral application for stay pending appeal on two grounds. Firstly, he contended that once consent was granted by the DOL to one person for subleasing, the consent continues. He submitted that point was arguable. Secondly, he submitted that if a stay is not granted, irreparable harm will be caused to the plaintiff, the defendants will not be prejudiced as plaintiff can pay costs and damages.
     

Mr Haniff, counsel for the defendants opposed the stay. He said the matter of written consent of the DOL is not an arguable point. The authorities are clear. The legislation is clear. He argued that prejudice will be caused to the defendants, as the plaintiff will stay on the premises and continue not paying rent. The plaintiff has not paid rent for 14 months and the arrears of rent is $ 364,000. He concluded that if a stay is granted, it must be conditional on the rent outstanding being paid. The defendants are entitled to the fruits of their success.

(e) I declined the application for stay on the ground there are no arguable grounds of law.

2. The present applications
   

There are presently three applications before me.

(i) The first is a summons filed by the defendants on 20th October,2015, for dissolution of injunctive orders of 20th December,2011, and 15th May,2012, in HBC 30 of 2011 and HBC 12 of 2011.

(ii) The second is a summons filed by the plaintiff on 26th October,2015, for stay of proceedings pending appeal to the FCA and an order restraining the defendants from interfering with the plaintiff's quiet use and occupation of the property. I have delivered order on the oral application for stay on 21st October, 2015. A second application for stay cannot be entertained. The court is "functus officio on that matter": Ellis v Scott, [1964] 2 All ER 987.

(iii) The third is a cross application filed by the defendants on 30th October,2015, for vacant possession and to dismiss the plaintiff's application for stay pending appeal and injunctive reliefs.

3. The determination
   

1. In my judgment of 21st October, 2015, I held that the agreement of 25th January, 2014, relied on by the plaintiff is null and void, since the written consent of the Director of Lands(DOL) was not obtained, in terms of section 13 of the State Lands Act,(Cap 132).
   
2. It follows that the plaintiff's occupation of the premises of the defendants is illegal and the defendants are entitled to vacant possession. The defendants have not accepted rent.
   

100. In Panjali v Dugu, (2010) FJHC 618 Calanchini J (as he then was) held that a defendant could not rely on a sub-lease to justify continuing in possession, due to its illegality.
     

4. Gates J (as he then was) in Prasad v Chand, (2001) 1 FLR 164 said:
   

Section 13 of the State Lands Act prohibits any dealing which is comprised in a State Lease, without the Director of Lands' consent. Whatever the nature of the permission granted to the Defendant (by the Plaintiff) to occupy the relevant State land, it was clearly unlawful because it lacked the Director's consent...

Apart from the paucity of evidence on the agreement with the Plaintiff's deceased father, the agreement itself falls short of the statutory prohibition on dealing with State leases..The Director has had no prior opportunity to evaluate the Defendant as a suitable tenant of the State, the very purpose for the consent provision. (emphasis added)

5. Mr Narayan, counsel for the plaintiff cites Nagar Bhai Kewal v Manikam Reddy,(FCA No 17 of 1982) and Chaganlal v Jaswant Kumari,(Action no.238 of 1984) for the proposition that an infringement of section 13 does not automatically entitle the defendant's possession in a summary way.
   
6. In the first case, the judgment of the FCA found the summary procedure inappropriate for the reason that "there was insufficient material on the record to enable the Court to decide the question of illegality".
   
7. In Chaganlal v Jaswant Kumari, the Court dismissed the argument that it was lawful for sub lessee to let flats from time to time without the consent of the Board.
   
8. I find no merit in the argument of Mr Narayan that the summons for vacant possession is disguised as an application under Or 14 r2. As Mr Haniff pointed out, the defendants have filed a cross summons for vacant possession.
   
9. In my judgment, the defendants are entitled to vacant possession of their premises.
   
10. The next matter is the interim relief sought by the plaintiff.
    
11. Mr Narayan relies on the principles laid down in the American Cyanmid case.
    

50. Mr Haniff, in riposte cites Lord Diplock in Siskina v Distos SA, (1979) AC 210 at page 256 as follows:
    

Injunction.. presupposes the existence of a cause of action on which to found the action. A right to obtain an interlocutory injunction is not a cause of action. It cannot stand on its own. It is dependent upon there being a pre-existing cause of action against the defendant arising out of an invasion, actual or threatened by him, of a legal or equitable right of the plaintiff for the enforcement of which the defendant is amenable to the jurisdiction of the court. The right to obtain an interlocutory injunction is merely ancillary and incidental to the pre-existing cause of action. It is granted to preserve the status quo pending the ascertainment by the court of the rights of the parties and the grant to the plaintiff of the relief to which his cause of action entitles him, which may or may not include a final injunction. (emphasis mine)

13. In Wakaya Ltd v Chambers,(Civil Appeal No. CBV0008/11) the judgment of the Court stated that "in the absence of a cause of action, the granting of the interim injunction was erroneous".(emphasis mine)
    
14. It was strenuously contended on behalf of the plaintiff that the issue of possession is a "live" one.
    
15. My decision on the preliminary issue has determined the plaintiff's claim in its entirety.
    
16. An application for an interlocutory injunction is a holding operation pending trial. Lord Diplock in the American Cyanamid postulated a trial.
    
17. The application for an interlocutory injunction is declined.
    
18. Finally, I come to the application by the defendants for dissolution of the injunctions granted on 20th December,2011 in HBC 12 of 2011, and extended on 15th May,2012, in Consolidated action HBC 30 of 2011 with 12 of 2011.
    
19. In HBC 12 of 2011, the plaintiff, in its statement of claim filed on 12th April,2011, sought a declaration that it has exercised its option to renew the Agreement to Lease of 10th August,2006, for a period of 5 years from 1st September,2009. The first defendant was ordered on 20th December,2011, to remove the posts and chain it erected on Crown Lease No 713833 and to allow the plaintiff peaceful occupation, access and egress of the premises until further order. On 15th May,2012, the injunction order was amended to include the second defendant .
    
20. I agree with Mr Haniff that the interim injunctions in the two cases are spent.
    
21. The injunctive orders cannot stand.
    

4. Orders
   

I make order as follows:

(i) The plaintiff shall give the defendants on or before 4th January,2016, vacant possession of the premises of Crown Lease no. 718687, being Lots 1A, 1B and 1C on Plan M2444 Labasa Township namely Crown Lease No. 26463 being Allotment 17, Section 1, Labasa Township comprising an area of 21.2 perches. Crown Lease No. 9129 being Lots 2A,2B and 2C on Plan M2444 Labasa Township comprising an area of 548m2 and also on Crown Lease No. 713833, being Lot 18, Section 1 on Plan M1644 Labasa Township formerly Crown Lease No. 26465 being Allotment 18, Section 1, Labasa Township comprising an area of 779m2 currently occupied by the plaintiff.

(ii) The plaintiff's application for an injunction is declined.

(iii) The interim injunctions issued in HBC 12 of 2011, on 20th December, 2011 and in Consolidated action HBC 30 of 2011 with 12 of 2011 on 15th May, 2012, are dissolved.

(iv) The plaintiff shall pay the defendants costs summarily assessed in a sum of $ 1500.

4th December,2015

A.L.B. Brito-Mutunayagam
Judge