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HIGH COURT OF SOLOMON
ISLANDS
Civil Case No. 175 of 2001
PHILIP KORYA & OT/span>
v
PETER A HASSALL
High Court of Solomon Islands
Frank O. Kabui, J
Civil Case Number 175 of 2001
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Hearing: 20th July
2001
Ruling: 23rd July
2001
P. Tegavota for the tiffs
Defendant not present
RULING
(Kabui, J):
By an ex parte Summonsmmons filed on 20th July 2001, the Plaintiffs
sought the following Orders -
1. That the defendant
himself, his servants, agents, employees, or any person authorized by the
defendant be restrained
by an interim injunction from carrying out all or
any of the following acts: -
[a] &nnbsp;ng kiss poss possessssession
of the vessel called "Sovereign" while within the jurisdiction of this
Court
of Solomon Islands;
[b] p; removalmoval
of any properties ines including documents, out of the said vessel;
[c] &nnbsp;val of the
vessel or any equipment and documents on board, out of Solomon Islands.
1">
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2. That the 3rd
plaintiff be allowed to enter the said vessel for the purpose of carrying
out his work until further orders.
3 That the Court to grant
such other or further orders as the Court sees fit.
4. Costs.
The Writ of Summons and the ex
parte Summons are yebe served upon the Defendant. The ex parte
applicatiocation was said
to be urgent, as there was the risk of the vessel
“Sovereign” being removed by the Defendant from Solomon Islands upon his
arrival in Honiara from Australia soon. I heard the Plaintiffs’ application
at 3:45 pm on Friday 20th July 2001. The application was
supported by sworn oral evidence adduced by Mr. Clark who is the 3rd
Plaintiff in the main action.
The facts
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The 1sup>Plaintiff
and the 2nd Plaintiff are the owners of Philma Export Fisherisheries
being a registered local entity. The 3rd Plaintiff is the
Manager/Consultant of a Joint Venture arrangement between the 1st
and 2nd Plaintiffs and the Defendant. A Joint Venture agreement
was signed on 6th November 2000 between the 1st
Plaintiff, the third Plaintiff and the Defendant. An undated charter
agreement was also signed by the same parties. A
third agreement was also
signed but was also undated between the 1St Plaintiff and the
Defendant. Foreign Investment approval had been duly obtained plus a fishing
licence. These formalities
having been completed, the Defendant brought into
Solomon Islands the vessel “Sovereign” and stage 1 of the Joint - Venture
commenced in Ysabel and in the Marovo Lagoon. The vessel “Sovereign” was in
port in Honiara on 10th July 2001. On that date, the Defendant
with other two expatriates accompanied by Police Officers boarded the vessel
“Sovereign”
and physically removed the 3rd Plaintiff from the
vessel and took control of the vessel with the intention to take it back to
Australia. The vessel later
developed engine trouble and is currently in
Tulagi awaiting repair.
The Evidence
One of the obligations of the
Defendant under the Joint - Venture agreement signed on 6th
November 2000 as for the Defendant to provide a vessel and equipment to
implement stage 1 of the Joint - Venture which
is pilot survey for fishing
and acquaculture. The costs incurred by the Defendant would be capitalized
as his equity
in the Joint Venture at 50% of net profit of the Joint -
Venture. Exhibit 2 is the charter agreement for the vessel “Sovereign”
pursuant to the Joint - Venture agreement (Exhibit1). The charter rate was
SBD1.00 per year. The 3rd Plaintiff was to manage the vessel as
well as being a Consultant. The fishing venture agreement (Exhibit 3)
confirms Exhibit
1 and 2. The relationship between the parties is not very
clear but the evidence would point to a partnership arrangement though
is
not conclusive at this stage of the case. The vessel is of course registered
in Sydney. The registration Number there
is 385717. Its length is 26.5
metres and weighs 320 tonnes. The vessel has been refurbished and has a
working life of
15 years. It is the major capital equipment in the Joint -
Venture. Its removal or repossession by the Defendant would be a
major blow
to the survival of the Joint - Venture. This is the fear of the Plaintiffs
because the Defendant has not said
why he wanted to repossess the vessel;.
He was arriving from Sydney on Saturday 21St July 2001. The third
Plaintiff in evidence said that one of the Defendant’s associates is a
skipper/engineer. There is
on the evidence the real possibility that the
vessel could be sailed to Australia at any time. Ownership of the vessel
would seem to be still foreign and under the control of the Defendant
because it is he who brought it into Solomon Islands
in the first place.
Although Exhibit 3 says the vessel is jointly owned by Philma Export
Fisheries 105 - 90 of Solomon
Islands and Philma Export Fisheries of
Australia, there is no evidence to confirm that intention. The more likely
position
is that the vessel is still foreign owned and its owner may want it
back in Australia for one reason or another. Although there
is no evidence
of the date the vessel entered Solomon Islands waters, there is evidence to
suggest that it came to Solomon
Islands only recently. It must have been in
Solomon Islands waters less than months. It may be that stage 1 of the Joint
- Venture agreement did not go according to the expectation of the Defendant
or that the Defendant himself has got into
trouble with the owner of the
vessel in Australia. No one knows. But the risk is there that the vessel may
have to be
returned to Australia.
The Law
The granting of mareva
nction is a mater of discretion. The guidelines as set out out in Lord
Denning, MR’s judgment in
Third Chandris Shipping Corporation and Others
v Unimarine S A The Phythia, The Angelic Wings, The Genie [1979]
2 A.E.R. 972 are these. First, the Plaintiff must disclose all materials in
his knowledge to the judge. Second, the Plaintiff must state
the particulars
of his claim against the Defendant in terms of the ground for his claim, the
amount claimed and the points
against the Defendant in a fair manner. Third,
the Plaintiff must state the grounds for his belief that the Defendant has
assets in the local jurisdiction. Fourth, the Plaintiff must give some
grounds for his belief that there is a risk of
the assets being removed
before judgment is obtained by the Plaintiff. Fifth, the Plaintiff must of
course give some
undertaking in damages. Sir Robert Megamy V.C. in
Barclay - Johnson v Yuill [1980] 1 WLR 1259 adds the following factors
to the need to establish the existence of a sufficient risk of removal of
the Defendant’s
assets. First, there must be the risk that the Defendant
would default if his assets were removed from the local jurisdiction.
Second, the Plaintiff must show a good arguable case short of a strong case
justifying judgment in the Plaintiff’s favour.
Third, the Plaintiff must
show that in weighing the balance of convenience, the scale should weigh in
his favour. The
purpose of these guidelines is to help avoid the procedure
for mareva injunctions being abused. This concern was expressed
by Kerr L.J.
in Z Ltd v A - Z [1982] 2 W L R 288 at 306. That is to say
... jurisdiction must
not be abused. In particular, I wouI would regard two types of situations as an
abuse of it. First,
the increasingly common one, as I believe, of a Mareva
injunction being applied for and granted in circumstances in which there
may
be no real danger of the defendant dissipating his assets to make himself
“judgment - proof”; where it may be invoked,
almost as a matter of course,
by a plaintiff in order to obtain security in advance for any judgment which
he may obtain;
and where its real effect is to exert pressure on the
defendant to settle the action. The second, and fortunately much rarer,
illustration of what I would regard as an abuse of this procedure, is where
it is used as a means of enabling a person
to make a payment under a
contract or intended contract to someone in circumstances where he regards
the demand for the
payment as unjustifiable; or where he actually believes,
or even knows, that the demand is unlawful; and where he obtains a
Mareva
injunction ex parte in advance of the payment, which is then immediately
served and has the effect of “freezing”
the sum paid over”...
Can the Orders sought be
granted?
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The eve adduced by the
Plaintiffs is contained in the Plaintiffs’ Writ of Summons, the ex p ex parte
summons and the oral
sworn evidence by Mr Clark, the 3rd
Plaintiffs, together with Exhibits 1 - 6 tendered in Court by him. The
evidence shows that the plaintiffs do have arguable
case against the
Defendant for breach of the Joint - Venture. The Plaintiffs claim no damages
but do claim permanent
injunction, declaration and repossession of the
vessel. Omission of claim for damages for breach of the Joint - Venture may
have been a mistake by the Plaintiff’s Solicitor but that is a matter for
the Plaintiffs’ Solicitor to consider later
on when challenged by the
Defendant. The vessel “Sovereign” is at Tulagi in Solomon Islands. In
evidence, Mr. Clark,
the 3rd Plaintiff said that the Defendant
told him on 10th July 2001 at the Point Cruz Wharf that he had
come to take the vessel “Sovereign” back to Australia. Mr. Clark also said
in evidence that one of the Defendant’s associates was a skipper/engineer,
the implication being that the vessel could
be easily sailed to Australia by
the Defendant. There is however no evidence that the Defendant would default
if the
vessel were removed from Solomon Islands but the implication to the
contrary is obvious. The Plaintiff did not give any undertaking
in damages.
Mr Clark said in evidence that he was not working since his removal from the
vessel on 10th July 2001. No evidence was given as to the
financial status of the 1St and 2nd Plaintiffs. On the
basis of the evidence adduced, I have formed the impression that the
Plaintiffs’ financial contribution
to the Joint - Venture was unspecified
and perhaps minimal only in terms of cash contribution. The thought of
making
an undertaking was, I thought, out of the question for them. At the
end of the day, the discretion of the Court that matters
exercised upon the
evidence before it. In fact, the Court may act under Order 53, rule 6 of the
High Court (Civil Procedure)
Rules 1964 (the High Court Rules) (see Percy
Elina v Everbright Commercial Enterprises Pte Ltd cc 125/1998). I am a
little troubled over order 2 in the ex parte application because it borders
on reinstatement of an
employee, for breach of employment contract. No
breach of employment contract has been pleaded. Mr. Clark, the 3rd
Plaintiff, however in his evidence said nothing about being an
employee of the Defendant and said nothing of being terminated
by the
Defendant other than being forcibly removed from the vessel. I feel that the
vessel must have someone to look
after it whilst in Solomon Islands waters
and therefore I would allow order 2 to stand as part of the ex parte orders
sought by the Plaintiffs which I granted on Friday 20th July
2001.
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F.O. Kabui
Judge
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