| Fiji Islands - Whittaker v Bhindi - Pacific Law Materials |
IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
CIVIL ACTION NO. 218 OF 1998
BETWEEN:
:
1. ROBERT WHITTAKER
2. CHEEPER STORES OF FIJI LIMITED
3. BRETT WHITTAKER
4. FORESHORE CONSTRUCTION PTY LIMbr> Plaintiffs
AND:
1. DESMUKHBHAI BHINDI
2. BHIKABHIA BHINDI
both sons of Sundarji Bhindi
Defendants
Mr. P. Hofor the Plae Plaintiffs
Mr. H. Nagin for the Defendants
DECISION
There are two applications before the Court by the Defendants. The first is the dissolutiointerim injunction granted nted to the Plaintiffs
on 28 May 1998. The second is the motion for an Order that the third and fourth Plaintiffs be struck out as parties as they have
no locus standi in this case and they have no cause of action against the Defendants.
Background facts
The second Plaintiff (Cheeper Stores of Fiji Limited) as the tenant and the first Plaintiff (Robert Whittaker) as the guarantor entered
into a Lease Agreement with the Defendants (owners) on 14 July 1992 in respect of the property comprised and described in Certificate
of Title No. 5946 situate at No. 55 Toorak Road; erected thereon is a two storey building (the "demised premises").
The tenant fell into arrears of rent which is admitted by the first Plaintiff and distress was levied by the owners.
The first Plaintiff says that some payments have been made towards the arrears. He says in his affidavit that if the Defendants furnish
"a full and complete account of all monies collected from the auction already conducted and from the continuous sale of items
from the premises", "the balance sum owing in respect of rent owed will be paid by the Second Plaintiff".
The third Plaintiff is a shareholder with the first Plaintiff in the fourth Plaintiff Company. The fourth Plaintiff Company is engaged
in various construction projects and certain of its construction equipment and plants are presently stored in the basement of the
demised premises. The retention of these items by the defendants, they say, is causing great hardship and difficulties with the construction
works now in progress. The fourth Plaintiff is asking the Court to order the release to it such plants and equipments as are the
lawful property of the fourth Plaintiff.
On 9 June 1998 the Plaintiffs issued a Writ of Summons claiming the relief set out therein.
In reply to the Plaintiffs' affidavit the Defendants state that the second Plaintiff (the Company) was in substantial arrears of rent
amounting to $32,250.00 as at February 1998. Distress for rent was levied by the Defendants. Despite promises made the first and
second Plaintiffs failed to pay the arrears of rent. Certain matters were not disclosed to Court when application was made ex parte
for an injunction herein including the fact that on 24 March 1998 the Second Plaintiff also agreed in writing to conduct a private
sale of the stock rather than to auction the same.
The rental arrears are still not paid after taking into account the sales and expenses that have been incurred.
Consideration of the issues
Both counsel filed written submissions in this matter to which I have given due consideration.
As for the submissions of Mr. Peter Howard I do not find anything in them opposing the applications before me except what the Plaintiffs
state in their affidavits.
Mr. Howard agrees that all that he has said relate to the substantive action and nothing was said by him as to why he has failed to
address the Court on the issues for Court's consideration.
As for dissolution of the interim injunction I agree fully with the arguments put forward by the learned Counsel for the Defendants.
The Plaintiffs' counsel has not made any legal submission on this aspect as I have already stated.
One of the grounds for dissolution is that if the injunction was granted on a suppression of material facts.
As Mr. Nagin submits, the Plaintiffs have not disclosed to this Court that they broke into the demised premises and unlawfully removed
several items from there on 28 March 1998 about which the defendants complained by a letter of 30 March 1998.
They also failed to disclose that the second Plaintiff itself requested for a private closing down sale of the stock and this sale
was conducted on its request to yield higher income from stock which would not have been sold for much in an auction although there
is no restriction on the mode of sale in a case for distress for rent.
For failure to disclose material facts the ex parte injunction can be dissolved. Mr. Nagin referred to two cases in this regard. In
VOTUALAILAI LTD v THE FIJI NATIONAL PROVIDENT FUND BOARD & ANOR (Lautoka C.A. No. 272 of 1988) where at page 10 the Court stated:
"The non disclosure of material facts, even if it is innocent or inadvertent, is enough to avoid the injunction. The cases of
material non disclosure as in this case the ex-parte injunction is liable to be dissolved on that ground alone, without any enquiry
into the merits of the case.
Thus there was no adequate grounds for granting injunction in the first place. There was material non disclosure of facts on the part
of the plaintiff and this ground alone is sufficient to have the interim injunction rescinded. For reasons given above the interim
injunction already granted will be rescinded with costs to the defendants."
And in REPUBLIC OF PERU v DREYFUS BROS. CO 55 LTR 802 at 803 Kay J said:
"I have always maintained, and I think it most important to maintain most strictly, the rule that, in ex parte applications to
this court, the utmost good faith must be observed. If there is an important misstatement, speaking for myself, I have never hesitated,
and never shall hesitate until the rule is altered, to discharge the order at once, so as to impress upon all persons who are suitors
in this court the importance of dealing in good faith with the court when ex parte applications are made."
There is also another ground on which I will dissolve the injunction and that is that there is no undertaking as to damages [NATIONAL AUSTRALIA BANK LIMITED & ORS v BON BREWING HOLDINGS LIMITED & ORS (1990) 169 CLR 271]. In the Bank case it was held "that the ex parte order should not have been made without an undertaking as to damages being offered or required".
The affidavit evidence reveals that the second Plaintiff has a winding-up petition against it which is prima facie evidence of the
fact that it is insolvent and is unable to pay its debts. The Second Plaintiff is evidently in financial straits and not in a position
to pay any damages, if any, is awarded against it. Injunction is refused in such a situation (KARIM BUKSH v HAZRA BIBI and NATIONAL BANK OF FIJI Civ. App. No. 1 of 1992)
This raises the principle of 'inadequacy of damages' (to either side) as formulated by LORD DIPLOCK in the House of Lords case in AMERICAN CYANAMID CO v ETHICON LTD [1975] UKHL 1; (1975) AC 396 at p 408 B-C where it is stated:
(i) 'The court should go on to consider whether ... if the plaintiff were to succeed at the trial in establishing his right to a permanent
injunction, he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant's
continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages ... would
be an adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally
be granted, however strong the plaintiff's claim appeared to be at that stage'. (at 408B-C)
On the other hand, if damages would not adequately compensate the plaintiffs for the damage, and they are in a financial position
to give an undertaking as to damages, and an award of damages pursuant to that undertaking would adequately compensate the defendants
in the event of the defendants succeeding at trial, an interlocutory injunction may be granted; and if the plaintiffs are not in
a financial position to honour their undertaking as to damages, in this case there is no undertaking at all, and appreciable damage
to the defendants is likely, an injunction must be refused (vide MORNING STAR CO-OPERATIVE SOCIETY LTD v EXPRESS NEWSPAPERS LTD (1979) FSR 113.
The Defendants in law are entitled to levy distress for arrears of rent. This is what they have done and they allege that despite
taking into account proceeds of sale since levying distress, the arrears is still there in the sum of $35,978.66. If the Plaintiffs
are affected by the Defendants' actions the Writ of Summons is there in which they seek certain relief and these could be decided
in the substantive action.
This is a case in which the Plaintiffs can be compensated for in damages which the Defendants are in a position to pay as they own
substantial property. "The very first principle of injunction law is that prima facie you do not obtain injunctions to restrain actionable wrongs,
for which damages are the proper remedy" [per LINDLEY L.J. in LONDON & BLACKWALL RAILWAY CO v CROSS [1886] UKLawRpCh 7; (1880) 31 Ch.D. 354 at 369].
As for the application for striking out of the third and fourth Plaintiffs as parties, bearing in mind the affidavit evidence before
me and upon perusal of the Writ of Summons herein to which no Statement of Defence has been filed as yet, I consider that the application
is premature. It could be considered after Statement of Defence has been filed by the Defendants.
I therefore order that the application remain on the file with liberty reserved to the defendants to revive it on seven days' notice
should they decide to do so.
Conclusion
In all the circumstances of this case the balance of convenience favours the discharge of the injunction. For these reasons the interim
injunction granted on 28 May 1998 is ordered to be dissolved with liberty reserved to the Defendants to revive their motion to strike
out the third and fourth Plaintiffs as parties on seven days' notice after Statement of Defence has been filed. Costs in the sum
of $200.00 is ordered to be paid by the Plaintiffs to the Defendants.
D. Pathik
Judge
At Suva
18 September 1998
Hbc0218d.98s
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