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Air Fiji Ltd v Kelton Investments Ltd [2005] FJHC 384; HBC0306D.2005S (14 December 2005)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0306D OF 2005S

BETWEEN:

AIR FIJI LIMITED
PLAINTIFF

AND:

KELTON INVESTMENTS LIMITED
DEFENDANT

Counsel for the Plaintiff : R. Lajendra : R. Patel & Co.
Counsel for the Defendant : I. Roache : Howards

Date of Decision: Wednesday, 14 December 2005
Time of Decision: 2.30 p.m.

DECISION

It is clear from the evidence before the Court that there is dispute, not only as to the amount but the actual existence of a debt. As far as the Plaintiff is concerned there has never been any resolution by the Board that authorized any payment of “guarantee fees” beyond the payments made on the two (2) Bandeirante aircrafts. Once the loan payments on these aircrafts were completed, the “guarantee fees” payment ceased. The minutes of the Board meeting of 13^th June 1995 gives substance to this belief. Paragraph 13 specifically stated that the Management Fees to be paid to Kelton Investment to be 1.5% per 6 months for the total loan amounts on the 2 aircrafts.

It could very well be that there were firm and legitimate grounds for the Defendant’s belief that the guarantee fees continued to be an item of expenditure on the Plaintiff’s books, but it is the basis of this belief that gives rise to the Plaintiff’s challenge.

It is not for this Court at this juncture to delve into any greater details in the examination of the facts or questions of law arising to try and adjudge the merits and decide on what the final outcome should be. It is enough for it to be satisfied that there is adequate evidence provided to lend support to the belief by the Court that there exists a genuine dispute of the debt and/or its existence.

The principles governing interim relief as set out in the American Cyanamid case do in fact favour the Plaintiff. It has established that a serious issue arises and that its claim is not frivolous or vexatious. The balance of convenience tends to favour the Plaintiff, in that the Defendant could be adequately compensated by the Plaintiff, should the Court find in the Defendant’s favour in the end.

Order is made against the Defendant and/or its servants or agents from proceedings with any Winding Up action or advertising any Winding Up petition, until further orders of the Court.

Costs of $300.00 to the Plaintiff.

F. Jitoko
JUDGE

At Suva
15 December 2005