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Inter Island Freight Services Ltd v Merchant Finance Ltd [2017] FJHC 277; HBC181.2016 (13 April 2017)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 181 of 2016

BETWEEN : INTER ISLAND FREIGHT SERVICES LIMITED a limited liability company having its registered office at 2 Lami Street, Suva.

PLAINTIFF

AND : MERCHANT FINANCE LIMITED a limited liability company having its registered office at Level 1, Ra Marama House, 91 Gordon Street, Suva.

DEFENDANT

BEFORE: Master Vishwa Datt Sharma

COUNSELS: Mr. Ami Kholi with Mr. Ashneel Nand for the Plaintiff

Mr. Nilesh Lajendra for the Defendant

DATE OF HEARING: 12^th April, 2017

DATE OF RULING: 13^th April, 2017

RULING

[Application by the Plaintiff seeking injunctive relief pursuant to Order 29 Rule 1 (1) of the High Court Rules, 1988 and the Inherent Jurisdiction of this Honorable Court]

APPLICATION

1. This is the Plaintiff’s Summons made pursuant to Order 29 Rule 1 (1) of the High Court Rules of 1988 and the Inherent Jurisdiction of this Honourable Court seeking the following orders:-
   • (a) To Restrain the Defendant its servants or agents or otherwise howsoever from dealing with the land comprised in the Certificate of Title No. 37069 being Lot 1 on DP 9417 in any manner whatsoever until the finalisation of this action; and
   • (b) That the Costs of this application be costs in the cause.
     
2. The Summons is supported by the Affidavit of Anil Deo in his capacity as the Managing Director of the Plaintiff’s Company.
3. The orders sought on the Plaintiff’s Summons were strongly objected to by the Defendant and filed an Affidavit in Opposition accordingly.
4. I must add that the Court intervened and used its Mediatory powers in terms of Order 59 of the High Court Rules, 1988 to mediate the Injunctive issue and see if both parties is able to resolve the issue bearing in mind what transpired between the parties with regards to the tender, award and the sale of the subject property to the Plaintiff, but to no success.
   

AFFIDAVITS FILED

5. (i) Affidavit in Support of Anil Deo deposed on 15^th September, 2016;

(ii) Supplementary Affidavit of Anil Deo deposed on 13^th October, 2016;

(iii) Affidavit in Opposition of Ema Lagilevu deposed on 04^th November, 2016; and

(iv) Affidavit in Reply of Anil Deo deposed on 11^th November, 2016.

THE LAW

6. Order 29 Rule 1 (1) of the High Court Rules, 1988 states –

1.-(1) An application for the grant of an injunction may be made by any party to a cause or matter before or after the trial of the cause or matter, whether or not a claim for the injunction was included in that party’s writ, originating summons, counterclaim or third party notice, as the case may be.

Plaintiff's Case

7. The Plaintiff submitted as follows-
   • The Defendant had invited for tenders of the said land by way of advertisement in the Fiji Times of 2^nd April, 2016. The Plaintiff successfully tendered for the said land in the sum of $2,570,000.00. He paid the required deposit of 2.5% in the sum of $64,250.00.
   • On the 16^th May, 2016 the Defendant’s agent offered in writing to sell the Plaintiff the land for the sum of $2.6 million dollars (VEP) which said offer was accepted by the Plaintiff in writing on the same day.
   • On the same day the Plaintiff’s agent thanked the Plaintiff for accepting its offer and instructed his servant and or agent to do a sale and purchase for the sale of the CT 37069.
   • On the 27^th of May, 2016 the Defendant withdrew its tender and refused to sell the property to the Plaintiff.
   • The Plaintiff on the 26^th of July, 2016 instituted an action in the High Court by filing a Writ of Summons.
   • The Plaintiff than subsequently amended its statement of claim and then filed the same with the Registry on the 26^th of August, 2016 seeking for the following reliefs;
     1. For an Order that the Defendant specifically performs the agreement for the sale of freehold land contained in CT NO. 37069 being Lot 1 on DP No. 9417 with total land area of 4011m2 situated in Vatuwaqa, Suva to the Plaintiff;
     2. An Order restraining the Defendant from selling the land or dealing with it in any manner whatsoever until the finalization of this action;
     100. Special and general damages;
     4. Costs on indemnity basis;
     5. Such other relief as the Court deems just and equitable in the circumstances.
        

Defendant’s Case

8. The Defendant submitted-
   • The Plaintiff had filed an application for injunction on 16 September, 2016. The application was returnable bon 11^th October, 2016.
   • On that date Defendant informed the Court the application is opposed and sought time to file Affidavit in Opposition. The Plaintiff while not opposing the request for time, sought for an interim injunction. That application was resisted by the Defendant. One of the things submitted on behalf of the Defendant to resist the interim injunction was that the Affidavit in Support had not provided sufficient undertaking.
   • Mr. Nand who had appeared on behalf of the Plaintiff requested time to file supplementary Affidavit to provide undertaking as to damages and requested the Court to adjourn the matter by 3 days i.e. be called on 14^th October, 2016 t enable Mr. Kohli to appear and request for interim injunction.
   • The Court granted the indulgence and allowed the request of the Plaintiff to file a Supplementary Affidavit and adjourned the matter by 3 days to be called on 14^th October, 2016. The Plaintiff filed the Supplementary Affidavit on 13^th October, 2016.
   • On 14^th October, 2016 Mr. Nand who again appeared for the Plaintiff requested for an interim injunction. The application was resisted by the Defendant.
   • Consequently in the interest of justice the Court heard brief preliminary arguments concerning the application to decide whether it would grant interim injunction. The Court upon noting there was no Sale and Purchase Agreement executed was not inclined to grant the interim injunction. Parties were also encouraged to explore possibility of resolving the matter amongst themselves. Timetable was set for Affidavits to be filed concerning the injunction application and the matter was adjourned to 22^nd November, 2016 to fix hearing date.
   • On 22^nd November, 2016 the Court noted that all Affidavits have been filed and the Plaintiff sought for hearing date. The Court enquired on the status of settlement talks. Mr. Nand informed the Court that their client though have verbally given them instructions they were awaiting written instructions before corresponding with the Defendant’s Solicitors on possibility of settlement.
   • It is specifically submitted on behalf of the Defendant though opportunity was given by the Court the Plaintiff did not engage in any settlement discussion.
   • Consequently on 9^th February, 2017 the Plaintiff sought for a hearing date and the Court then allocated the matter for hearing on 1^st June, 2017 at 11.30am.
   • The Defendant then on 25^th March, 2017 caused an advertisement calling for tender of the subject land- Certificate of Title 30769. The tender would close on 13^th April, 2017 by 4pm. The Plaintiff then proceeded to file an application to vacate the hearing date of 1^st June, 2017 and to re-fix the matter before 13^th April, 2017 or in the alternative an interim injunction be granted until the application is heard and determined. The application was filed on 31^st March, 2017 and listed for first call on 6^th April, 2017.
   • The Defendant opposes the injunction application.
     

Analysis and Determination

9. The orders sought as per the Summons is a final Order in terms of a mandatory and a restraining order.
10. The principles for granting a mandatory injunction was set out in Redland Bricks Ltd –v- Morris (1969) 2 ALL ER 576-
    • (a) A mandatory injunction can only be granted where the plaintiff shows a very strong probability on the facts that grave damage will accrue to him in the future. It is a jurisdiction to be exercised sparingly and with caution, but in the proper case unhesitatingly.
      
    • (b) Damages will not be a sufficient or adequate remedy if such damage does happen.
      
    • (c) The cost to the defendant to do the work or the act must be taken into account.
      
    • (d) The court must be careful to see that the defendant knows exactly what he has to do.

However, the House of Lords went on to say that every case must depend essentially on its own particular circumstances and the same applies to this very instant case. [Emphasis mine]

11. In a mandatory injunction case,principles ples to adhere will change on the circumstance of the case.
12. The Plaintiff is seeking an order To Restrain the Dthe Defendant, its servants or agents or otherwise howsoever from dealing with the land comprised in the Certificate of Title No. 37069 being Lot 1 on DP 9417 in any manner whatsoever until the finalisation of this action.
13. In determining this application, the test the court should follow was laid down in American Cynamide Co –vs- Ethican Ltd [1975] UKHL 1; (1975) AC 396. As per the said case in granting injunctive relief, the court should consider the following: -
    1. Whether there is a prima facie case with the probabilities of plaintiff succeeding and whether there is a serious issue to be tried.
    2. Whether the balance of convenience favours the court exercising its discretion in favour of the plaintiff.
    3. Undertaking as to damages.

29. The consequence of granting the injunction especially in the nature of a mandatory `and a restraining nature has been considered by this court. It is important to note that after the Court documents; including the Summons, Notice of Motion, Affidavit in Support and the Writ of Summons as the substantive matter were served on to the Defendant, The Defendant opted to strongly counter the Injunctive Relief sought by the Plaintiff and thereafter filed the Affidavit in Opposition and argued the case accordingly.

14. The evidence before this Court is that he Defendant is the registered proprietor of Certificate of Title No. 37069 which is the subject matter of both the Substantive Writ of Summons and the Interlocutory Injunction application. The Defendant invited for “Tenders” for the sale of the subject property in the local newspapers in April and May, 2016.The conditions of the Tender were to submit a 2.5 % of the tendered amount as deposit and that the tender would close on 15^th April, 2016. The Plaintiff submitted his tender on 13^th April, 2016, bidding a tender for $2,570,000-00. But it is noted that the 2.5% deposit of $64,200-00 was paid 3 days after the close of tender on 18^th April, 2016. On 16^th May, 2016, the Defendant through its Chief Executive Officer negotiated with the Plaintiff to increase the offer from $2,570,000 to $2,600,000 (VEP). This offer of the Defendant was accepted by the Plaintiff in writing via an e mail on the same day. On the same day, thereafter, the CEO thanked the Plaintiff for accepting the Defendant’s offer and also instructed its agents to draft a Sale and Purchase Agreement. This never took place and therefore no Sale and Purchase Agreement was ever executed between the Plaintiff and the Defendant. On 27^th May, 2016, the Defendant withdrew its tender awarded to the Plaintiff and refused to sell the subject property to the Plaintiff. This refusal of the Defendant prompted the Plaintiff to file and commence a Court Action and seek for the various orders as enumerated in Writ of Summons and the Statement of Claim.

Whether there is a serious issue to be tried?

15. The Parties are in dispute as to whether there is (are) serious issues to be tried. Since they are pointing a finger at each other demonstrates the fact that there is/or are to be tried by the Court of Law. Let’s examine what the parties had to submit-
16. According to the Defendant, there exists no serious Questions or tribal issues. Based on the exchange of correspondences, the Plaintiff is alleging breach of contract in terms of paragraph 11 of his Statement of claim and is seeking relief for Specific Performance. He said that the action is brought on the premise that there is an Agreement in place. There is no existence of a draft or any Sale & Purchase Agreement since it was never drawn up. Whilst the Defendant was waiting for the draft Sale & Purchase Agreement, the Defendant then proceeded to withdraw from the sale of this subject property.
17. On the other hand, the Plaintiff submitted that the following issues arise which requires to be tried-

Whether or not simply agreeing to the sale of land through written communications constitutes a valid and binding contract between the parties, Whether or not Sales and Purchases Agreement is a requirement to show the intention of the party to contract, whether or not the Plaintiff has complied with the provisions of Section 59 of the Indemnity Guarantee and Bailment Act (Cap 232), whether or not the absence of written agreement can communication by e mail exchange for sale and purchase of a property be construed as an intention of the parties to enter into a contract, whether or not the Defendant is estopped from withdrawing its tender from the Plaintiff Company.

18. In light of the Plaintiff’s pleadings, according to the Plaintiff, it is clear that the Plaintiff’s claim is not frivolous and or vexatious and that there are serious issues to be tried at the hearing.
19. The Question that arose to mind during the hearing and put to the Defence Counsel was when the employee and or agents of the Plaintiff were directed by the CEO to draw up the Sale & Purchase Agreement, why was it not done? Should the Plaintiff be blamed for that? After all, the Plaintiff even agreed to increase the initial tender bid or price from $2,570,000 to $2.6 million.

In reply, the Defence Counsel answered by saying that there was no obligation on the part of the Defendant to furnish any rational as to why the tender offered to the Plaintiff was withdrawn. In terms of the 59 (d) of the Indemnity Guarantee and Bailment Act (Cap 232), it states (d) upon any contract or sale of lands, tenements or hereditaments or any interest in or concerning them; unless the agreement upon which such action is to be brought or some memorandum or note thereof is in writing and signed by the party to be charged there or some other person thereunto by him lawfully authorised.

20. In this case, the CEO of the Defendant was lawfully authorised to carry out the Defendants day to day work including the directive that he gave to Ema Lagilevu (Manager Legal) to draw up a Sale & Purchase Agreement ( paragraph 7 of Defendant’s Affidavit in Opposition refers), of which neither the Plaintiff nor the Defendant was aware of and the Court did endeavour to find out if the Sale & Purchase was ever drawn up. There was no answer from the Counsel and the court understood that no Sale & Purchase Agreement was ever prepared and executed and an answer needs to be obtained at the trial. It also becomes a tribal issue otherwise the Plaintiff will never be able to know why the tender was withdrawn by the Defendant.
21. Bearing in mind Lord Diplock’s observation that “a resolution of conflicts on facts and claims in Affidavit or difficult Questions of law is not for the Court at this stage to decide” but should be left for the trial Judge to decide. (Emphasis is mine).
22. I find as a fact that there are numerous tribal issues that need to be ironed out at the trial when the evidence of witnesses is tested under oath.

Undertaking as to damages

23. There has been an undertaking given by Anil Deo in his capacity as the Managing Director in his affidavit deposed on 15^th September, 2016 and the supplementary affidavit filed on 13^th October, 2016, that “I undertake to pay any damages sustained by grant of this Injunction and that the Company owns substantial assets and is in a position to pay damages.” Further there is evidence of list of Company assets together with its financial statements for the year ending 31^st December, 2015. The Company has a total assets of approximately $3.1 million dollars and turnover after deduction of liabilities the Company derived a profit of half a million dollars.’
24. Whereas, the Plaintiff submitted that ... ‘the American Cyanamid principles clearly indicate that if damages are an adequate remedy than an interim injunction would not be granted. This is expressed in the speech of Lord Diplock where at page 408, his Lordship states as follows-

“..if damages in the measure recoverable at common law would be adequate remedy and the Defendant would be in a financial position to pay them, no interlocutory injunction should be normally be granted, however, strong the Plaintiff’s claim appeared to be at that stage...”

25. The Plaintiff Company is financially healthy with the $3.1 million dollars assets in place and derives a substantial amount of profit up to half a million dollars at the end of 31^st December, 2015, as deposed in his affidavit by Anil Deo, the Managing Director of the Plaintiff’s company.
26. However, I make reference to the case of Devi –v- Prasad [2016] FJHC 442. Hon Justice Kumar stated therein that “even damages would be adequate remedy; the view of the Court is that it should consider the balance of convenience and not strike out application on this basis only.” (This was submitted by the Plaintiff’s Counsel).
27. The application before this Court is not that of a striking out application rather whether the injunctive relief sought herein by the Plaintiff should be allowed?
28. The Application in terms of the adequacy or the undertaking as to damages favours the Plaintiff’s case. The Defendant is the owner and proprietor of the land in Question which is the subject matter of the Substantive as well as the Injunctive relief that is being currently sought by the Plaintiff. The sale of the subject land/and or property has been advertised inviting tenders and it would change hands to a third party if this Court does not grant the injunctive relief sought - ‘To Restrain the Defendant its servants or agents or otherwise howsoever from dealing with the land comprised in the Certificate of Title No. 37069 being Lot 1 on DP 9417 in any manner whatsoever until the finalisation of this action.’

Whether the balance of convenience favours the court exercising its discretion in favour of the plaintiff?

29. The third Test called the ‘Balance of Convenience” will determine which party of the two, whether the Plaintiff or the Defendant will suffer the greater harm from granting or refusal of an interlocutory injunction pending the decision on the merits of the substantive impending application filed by the Plaintiff in terms of the Writ of Summons.
30. In the current case the Defendant is the owner and the proprietor of the subject land/and or property which is the subject matter of this case. There will be no harm caused to the Defendant if this Court grants the Injunctive Relief sought herein. The reason being the Defendant will still remain the owner and or proprietor of the subject property until the final determination of the substantive action.
31. As I see that it will be the Plaintiff who will suffer greater harm and risk if this court does not accede to grant the Injunctive Relief sought by the Plaintiff. The reason being he was the successful bidder of the tender that was advertised in the local daily and was awarded the Tender to buy the said land/ property in Question. Eventually, the Defendant for one reason or the other withdrew its tender and refused to sell the land to the Plaintiff. The Plaintiff was not told the rationale behind this withdrawal and still seeks to find out the reason for the withdrawal of the tender awarded to him.
32. Further, the Defendant was aware that there was an impending Summons before Court seeking an injunctive relief in terms of the subject property/and or land in this case. Still the Defendant went ahead to advertise the Tender for the sale of this land. The closing date of the tender appeared to be the 13^th April, 2016. The Plaintiff was caught by surprise when he read the advertisement for tender of the same land and resorted to make an application and advance the hearing of the Summons seeking the Injunctive relief-“To Restrain the Defendant its servants or agents or otherwise howsoever from dealing with the land comprised in the Certificate of Title No. 37069 being Lot 1 on DP 9417 in any manner whatsoever until the finalisation of this action.
33. Hence the current proceedings before Court now.
34. In the circumstances, with the evidence and submissions furnished to Court, I am inclined to think that the balance of convenience in this matter goes in favour of the Plaintiff.
    

In Conclusion

35. The balance of convenience is favouring the grant of the injunction and orders against the Defendant as sought for in his Summons filed on 15^th September, 2016.
36. In the circumstances and for the aforesaid rational the discretion of the Court is to be exercised in favour of the Summons seeking the Injunctive orders therein accordingly.

FINAL ORDERS

1. An injunction restraining the Defendant its servants or agents or otherwise howsoever from dealing with the land comprised in the Certificate of Title No. 37069 being Lot 1 on DP 9417 in any manner whatsoever until the finalisation of this action and or further orders of this Court;
2. Cost of this application to be in the cause;

100. The Plaintiff to seal the Court Orders and serve the same onto the Defendant forthwith.

4. Matter to be listed for further direction on 24^th May, 2017 at 9 am.
   

Dated at Suva this 13^th day of APRIL, 2017

................................................................
MR VISHWA DATT SHARMA

Master of High Court, Suva


cc: Ms. Kholi & Singh, Labasa.
Lajendra Lawyers, Suva.