Home | Databases | WorldLII | Search | Feedback Tonga Law Reports

Cho v Hwang [2009] TongaLawRp 68; [2009] Tonga LR 473 (26 November 2009)

IN THE SUPREME COURT OF TONGA
Supreme Court, Nuku'alofa

CV 272/2009

Cho anors

v

Hwang anor

Laurenson J
26 November 2009; 26 November 2009

Practice and procedure – interim orders sought – to preserve assets pending resolution – granted

The parties were involved in a business venture. The first applicant was the person who paid much of the capital to the venture. In the meantime, the parties had fallen apart and there were real arguments between them as to who was entitled to various assets and who was entitled to the product being produced by the company. The dispute between the parties would not be able to be heard until at least the middle of 2010. The applicants had not filed a statement of claim but undertook to file and serve a statement of claim by 12:30 on Wednesday 2 December 2009. The applicants applied for an interim injunction and interim orders.

Held:

1. The intent of the orders sought was to preserve the position pending final resolution.

2. The applicants had an arguable claim to preserve their interest in the company and assets. The Court was satisfied that there were serious questions to be tried, therefore, it was an appropriate case for the Court's discretion to be exercised in favour of granting the draft orders based on the balance of convenience which was to preserve assets pending the final outcome.

3. If the orders were not obeyed then the respondents would be in default and liable to penalty accordingly. The Court directed that the respondents were to comply with the orders by 4:30 pm on the following Monday. If they failed to do so, then it would be for the applicants to take whatever further action they saw fit.

Case considered:

American Cyanimid Co v Ethicon Ltd [1975] AC 396

Counsel for the applicants : Mr Fusitu'a
Counsel for the respondents : Mr Edwards

Judgment

The applicants have applied for an interim injunction and interim orders.

The applications arise out of a business venture involving the parties. It is clear from submissions made to me by his counsel Mr. Edwards that the 1st applicant has been the person who has paid much of the capital to the venture. In the meantime, the parties have fallen apart and there are real arguments between them as to who is entitled to various assets and perhaps more particularly who is entitled to the product being produced by the company. It is unfortunately the case that the disputes between the parties will not be able to be heard until at least the middle of next year and I am concerned that the assets previously held by the parties being preserved pending that time. The applicants have not filed a statement of claim but have undertaken, to file and serve statement of claim by 12:30 on Wednesday 2.12.09. According to rule 22.7, if an application is one of extreme urgency, the court may make an order upon the applicant undertaking to issue a writ within a specified time and that undertaking is to be endorsed at the foot of the application for injunction. I see no reason why in this case that cannot be done now. There will be an order accordingly that the applicants' counsel attend to that forthwith.

The applicants have filed a draft order all directed to the issue of preservation of assets and ensuring that the company in which they are minority shareholders shall not take any further steps to have them removed as directors. As I say, the whole intent of the orders sought is to preserve the position pending final resolution. As I have indicated, the court is concerned in terms of American Cyanimid Co v Ethicon Ltd [1975] AC 396, to address the following matters, the applicants are to establish a good arguable claim and then establish that there is a serious question to be tried, if they are able to establish that then the court must as a matter of discretion determine the matter on the balance of convenience. I have heard lengthy submissions from counsels outlining the background to this matter. I have no idea at this stage what is likely to be the final outcome but certainly, the applicants have an arguable claim to preserve their interest in the company and assets at this stage. I am also satisfied that there are serious questions to be tried this being the case, I am satisfied that this is an appropriate case for the court's discretion to be exercised in favour of granting the draft orders based on the balance of convenience which as I've already noted I perceived to be to preserve assets pending the final outcome. There will be cost in the cause and order that the applicants' counsel attend on the Registrar and endorsed an undertaking in terms of the order already made on 23 November namely that the applicants will file and serve a statement of claim by 12:30 pm Wednesday 2 December 2009.

Leave to apply for further directions on 48 hours notice.

Mr. Fusitu'a raises the question whether some further orders should be made in respect of the orders numbers 2 and 4 of the order dated 23 November 2009. Pointing out that until those position is known with regards to each of those matters it would be difficult prepare a statement of claim. I don't accept that, the statement of claim will still be prepared but without the precise figures. More importantly though is the question, what time should be given to the respondents to attend to both those two matters? Mr. Fusitu'a points out that the respondents are both at default. Mr. Fusitu'a raises the point that orders numbers 2 and 6 have not been complied with, that the respondents are therefore in default. Mr. Edwards says that he has done what he can to get the documents; his client apparently is not being helpful as it should be. The question, what is to be done? If the orders are not obeyed then the respondents are in default and are liable to penalty accordingly. I therefore direct that the respondents are to comply with these orders by 4:30 pm on Monday next. If they fail to do so, then it will be for the applicants to take whatever further action they see fit.

There will be one final order that either party or any party may seek further directions on 38 days notice.