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Deo Construction Development Company Ltd v Denarau Corporation Ltd [2016] FJHC 492; HBC184.2014 (16 May 2016)

IN THE HIGH COURT OF FIJI AT LAUTOKA

CIVIL JURISDICTION

Civil Action No. HBC 184 of 2014

Counsel : Ms B Narayan for defendant/applicant

Mr A K Narayan for plaintiff/respondent

Date of Hearing : 12 May 2016

Date of Ruling : 16 May 2016

R U L I N G

[On Stay]

Introduction

[01] This ruling concerns with an application for stay pending appeal.

[02] By summons dated 29 April 2016(‘the application’) the defendant is seeking a stay pending appeal on all execution, assessment of damages and enforcement proceedings pursuant to the Judgment delivered by this court on 24 February 2015 [my judgment] until the hearing and determination of the Summons for Leave to Appeal filed in the Court of Appeal and in the event such leave is granted until delivery of the Judgment of the Court of Appeal.

[03] The application is supported by an affidavit of RupeniFonmanu sworn on 28 April 2016.

[04] The plaintiff strongly opposes the application. On 10 May 2016 the plaintiff filed an affidavit ofVimalDeo, Managing Director of the plaintiff. This affidavit was served on the defendant yesterday (11 May 2016).

[05] When the matter came up for hearing today (12 May 2016), counsel for the defendant, Ms Narayan sought leave of the court to file affidavit in reply to the affidavit filed by the plaintiff in opposition. She sought an adjournment of the hearing for that purpose. Also, she applied for an interim stay until final determination of the application for stay.

[06] Mr Narayan, counsel for the plaintiff replied that the plaintiff has filed a short affidavit. That affidavit does not depose any disputed facts. Therefore there is no need to respond to it, and he is ready to proceed with the hearing. He further submitted that if they insist on filing affidavit in reply, he is ready to withdraw that affidavit.

[07] Ms Narayan still insisted on her application that she needs to file an affidavit in reply.

[08] The court then allowed Mr Narayan to withdraw his affidavit. Accordingly, the affidavit filed on behalf of the plaintiff in opposition stands withdrawn.

[09] At the hearing of the substantive matter,both parties made oral submissions. Only Mr Narayan tendered his written submission.

Background

[10]Deo Construction Development Company Limited (the plaintiff/ respondent in these proceedings) initiated proceedings by way of originating summons against Denarau Corporation Limited (thedefendant/applicant in these proceedings).

[11] The court after hearing evidence adduced through affidavits determined liability and on 24 February 2015 delivered judgment against the defendant. In the judgment the court ordered amongst other things that damages to be assessed.

[12]The defendant filed application for leave to appeal that judgment to this court which was refused on 26 January 2016. The defendant has now filed a fresh leave to appeal application in the Fiji Court of Appeal by a summons filed on 4 March 2016. That leave application is yet to be decided.

[13] The current application is a stay of execution-stay of proceedings on the notice of assessment of damage, which is listed before the Master on 19 May 2016-pending the hearing of the leave to appeal application to the Fiji Court of Appeal.

The Law

[14] Order 34 of the Court of Appeal Rules (‘CAR’) would be applicable to an application for stay of execution. That rules so far as material provides:

‘34.- (1) Except so far as the court below or the Court of Appeal may otherwise direct-

(a) an appeal shall not operate as a stay of execution or of proceedings under the decision of the court below;
(b) no immediate act or proceeding shall be invalidated by an appeal.

(2) ...’

The Governing Principle

[15] The relevant questions to be asked when considering an application for stay of execution include:

(a) If a stay is refused, what are the risks of the appeal being stifled?

(b) If a stay is granted and the appeal fails, what are the risks that the respondent will be unable to enforce the judgment?

(c) If a stay is refuse the appeal succeeds, and the judgment is enforced in the mthe meantime, what are the risks of the appellant being able to recover what has been paid to the respondent?

(See Hammond Suddard Solicitors v Agrichem International Holdings Ltd [2001] EWCA Civ 1915, LTL 18/12/2001)

[16] The Fiji Court of Appeal in Natural Waters of Viti Ltd v Crystal Clear Mineral Water (Fiji) Ltd (FAC Civil Appeal No. ABU 0011 of 2004S (18 March 2005 at page 3) outlined the relevant principle on applications for stay pending appeal as follows:

“The principles to be applied on an application for stay pending appeal are conveniently summarised in the New Zealand text, McGechan on Procedure (2005):

“On a stay application the Court’s task is “carefully to weight all of the factors in the balance between the right of a successful litigant to have the fruits of a judgment and the need to preserve the position in case the appeal is successful”. Duncan v Osborne Building Ltd (1992) 6 PRNZ 85 (CA), at p 87.

The following non-comprehensive list of factors conventionally taken into account by a Court in considering a stay emerge from Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNC 48, at p 50 and Area One Consortium Ltd v Treaty of Waitangi Fisheries Commission (1993) 7 PRNZ 200:

(a) Whether, if no stay is granted, the applicant’s right of appeal will be rendered nugatory) this is not determinative). See Philip 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 bona 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”

Discussion

[17] The defendant has applied to this court for an order to stay execution of the judgment of this court [my judgment] delivered on 24 February 2015. In that judgment the court ordered that the defendant is to grant the development consent to the plaintiff and that the defendant do pay damage, which to be assessed, to the plaintiff for wrongfully withholding the consent.

[18]It should be noted that following the judgment the defendant has issued the development consent requested by the plaintiff. This was informed by counsel for the plaintiff, Mr A K Narayan during the course of the hearing. The main part of the judgment has been complied with.

[19] The defendant made an application to this court for leave to appeal the judgment delivered on 24 January 2015. That application was refused on 26 January 2016.

[20] Subsequently, the defendant has now filed a fresh application to the Court of Appeal by summons filed on 4 March 2016. The application filed in the Court of Appeal is yet to be determined.

[21] The plaintiff on 2 March 2015 filed a notice of assessment of damage consequent to the judgment of 24 February 2015. The hearing on that notice is listed before the Master on 19 May 2016. The defendant’s present application seeks to stay the assessment of damage hearing, pending appeal.

[22] Counsel appearing for the defendant Ms Narayan submits that the appeal will be rendered nugatory if a stay pending appeal is not granted and that the plaintiff will not be prejudiced by the stay and there is nothing to show that the plaintiff will be prejudiced by the stay. She relies on the case authority of (1) Ravind Millan Lal &Ors vLandTransport Authority Civil Action No.213 of 1994, (2) Facciola v Nasau [2011] FJHC 156; HBC64.2010L (10 March 2011) and ViliameSogari v Shiu Rajamma, NLTB &Ors; Civil Action No.36 of 2007 (Labasa).

[23] Mr Narayan, counsel for the plaintiff contends that, there is no appeal pending as argued by the defendant. What is pending in the Court of Appeal is an application filed by the defendant seeking leave to appeal the judgment delivered by this court on 24 February 2016. He goes on to submits that even an appeal will not operate as a stay of execution. A successful party should not be derived of fruits of the judgment. He concludes that the applications to stay of execution should be refused.

[24] I will apply the relevant principles on a stay application as enunciated in Natural Waters to this application. Not all the factors/principles are relevant in this application. I will discuss only the factors as may be relevant to the application.

Whether, if no stay is granted, the applicant’s right of appeal will be rendered nugatory:

[25] The Court of Appeal in Natural Waters held that this was not determinative.

[26] The defendant in the affidavit in support specifically in para 4 to 8 states:

‘...

4. The Defendant had initially filed an application for Leave to Appeal in the High Court at Lautoka on 26^thJanuary 2016 His Lordship, Honourable Mr Justice M H Mohamed Ajmeer dismissed the application for Leave to Appeal. The Defendant has then filed a fresh application for Leave to Appeal in the Court of Appeal.
5. In the meantime the Plaintiff has filed a Notice of Assessment of Damages, which Assessment is listed for Hearing before Master Jude Nanayakkara on 19^th May 2016.
6. I am advised by our solicitors and verily believe that the Defendant has arguable grounds of appeal that raise important issues of law which warrant prior determination by the Court of Appeal and which has reasonable changes of success.
7. This application for Stay of execution of the Judgment delivered on 24^th February 2015 is made on grounds that in the event the Defendant’s appeal is successful in the Court of Appeal, the Court of Appeal’s decision shall be rendered substantially if not wholly nugatory if the Plaintiff proceeds with its Notice of Assessment of Damages. The defendant’s Solicitors have advised the Defendant that the Plaintiff is proceeding to assessment of damages based on findings by His Lordship, Honourable Mr Justice M H Mohamed Ajmeer that the Plaintiff was entitled to an award of damages on the basis that the plaintiff had proved that it suffered loss as a result of the defendants refusal to grant development consent, where there was only mere assertions of such loss. There was no evidence at all put before the Court to show that any loss was in fact suffered bythe Plaintiff and there was also no evidence of any link between the Defendant’s refusal of development consent and the claim of alleged loss suffered.Such finding of liability against the Defendant to pay damages to the Plaintiff is therefore being challenged by the Defendant from the outset and is included as a proposed ground of appeal in the application for Leave to Appeal that is currently before the Court of Appeal.
8. If a Stay of execution of Judgment is not granted, then the Plaintiff will be forced to go through a protracted and expensive exercise of litigating the action on assessment of damages and there will be serious prejudice to the Defendant as the Court assessing damages will be deemed to accept that the Defendant is liable to the Plaintiff.

...’

[27] The defendant’s argument precisely is that in the event the defendant’s appeal is successful in the Court of Appeal, the Court of Appeal’s decision shall be rendered substantially if not wholly nugatory if the Plaintiff proceeds with its Notice of Assessment of Damages.

[28] Initiating an appeal does not have the automatic effect of staying execution on any judgment obtained.

[29] By CAR, r.34 (1), an appeal will operate as a stay of execution or of proceedings under the decision of the court below only if the court below or the Court of Appeal so orders.

[30] The basic rule is that a litigant is entitled to enjoy the fruits of its success. The court has unfettered discretion to impose a stay of execution if the justice of the case so demands (BMW AG vCommissioner of HMRevenue and Customs [2008] EWCA Civ 1028, LTL 7/10/2008).

[31] The enforcement should be allowed to proceed unless in all circumstances of the case and having regard to the risk of injustice to the parties(Gater Assets Ltd v NAC NaftagazUkrainiy [2008] EWCA Civ 1051, LTL 8/10/2008).

[32] The defendant submits that the right of appeal will be rendered nugatory if a stay is not granted. Nevertheless, the defendant fails to show how the appeal will be stifled or the risk of injustice if the enforcement is allowed to proceed. The main order under the judgment has been complied with by the defendant after the delivery of the judgment. The only remaining part of the judgment is payment of damage, which is to be assessed. Currently there is no appeal pending. What is pending in the Court of Appeal is the defendant’s application for leave to appeal.

[33] I will ask myself the question‘If a stay is refused and the appeal succeeds, and the judgment is enforced in the meantime, what are the risks of the appellant being able to recover what has been paid to the respondent?’

[34] There is nothing in the supporting affidavit filed by the defendant that there are risks of the defendant being able to recover what has been paid to the plaintiff if a stay is refused and the appeal succeeds. Indeed, this issue was neither raised in the defendant’s affidavit nor argued at the hearing. Therefore the plaintiff is not obliged to show that it is able to return what has been paid with interest and costs if a stay is refused and the appeal succeeds, and the judgment is enforced in the meantime.

[35] In the cases cited by the defendant (see para 20 above) the court granted stay of execution on the basis that there were risks of the appellant being able to recover what has been paid to the respondent if a stay is refused and the appeal succeeds, and the judgment is enforced in the meantime. That situation does not arise in the matter at hand. There the cases cited by the defendant are of little assistance to the defendant.

The overall balance of convenience and the status quo

[36] Under this the court has to strike between the two conflicting considerations, namely that a litigant is entitled to the fruits of the judgment forthwith and the obvious injustice in refusing a stay where such refusal will render the appeal nugatory or substantially nugatory.

[37] The defendant is attempting to stay the court assessing damages. The damage assessment hearing listed before the Master on 19 May 2016. The defendant will not be ruined by assessment of damage. After assessment the defendant will have right to appeal against the quantum award. The defendant will also have an opportunity to apply for stay of execution on quantum award. In my opinion balance of convenience favours the court assessing damages. A similar situation arose in Naiveli v Disciplined Services Commission [2002] FJHC 323; HBJ0012.1999 (13 November 2002) where the court held:

‘Execution is not an issue now. The issue of execution would only arise once the court assesses the damages. The balance of convenience lies heavily in favour of this court assessing damages now. The respondent/applicants have appealed against liability. The Court of Appeal rules against them, then they might again appeal against quantum of the award. Hence, if the assessment is done now, both liability and quantum could be heard together on appeal saving court’s time and resources rather than matters being dealt on piecemeal basis.’

Conclusion

[38] There is no appeal pending before the Court of Appeal. What is pending before the Court of Appeal is an application for leave to appeal the judgment of this court delivered on 24 February 2015 after this court refusing to grant leave to appeal. The defendant did not appeal this court’s decision refusing to grant leave to appeal. The defendant has now filed a fresh application to the Court of Appeal for leave to appeal. That leave application has been filed in the Court of Appeal on 4 March 2016, over one year after the pronouncement of the judgment. There is no application to appeal out of time. The defendant is seeking a stay on the hearing of the assessment of damage. Execution is not an issue here. The main part of the judgment has been complied with after the judgment. The defendant might appeal the award on quantum. In these circumstances, there is no risk of the appeal beingstifled or rendered nugatory. The balance of convenience favours the court assessing the damage. For all these reasons I would refuse to order stay on the assessment of damage hearing.

Costs

[39]The plaintiff seeks costs on indemnity basis. The court has absolute and unfettered discretion to award costs. This is not an exceptional case for awarding costs on indemnity basis. I do not find this application is an abuse of process. The plaintiff is entitled to costs in any event. The plaintiff has made a single appearance through his counsel at the hearing of the application. The plaintiff opted not to file any document. I therefore, taking all into account, summarily assessed the costs at $600.00.

Final outcome

1. Defendant’s application for stay of execution refused.
   
2. Defendant will pay costs of $600.00, which is summarily assessed, to the plaintiff.
   

.............................................................

M H Mohamed Ajmeer

JUDGE

At Lautoka

16 May 2016

Solicitors

For plaintiff: A K Lawyers Barristers & Solicitors

For defendant: Lateef & Lateef Lawyers