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Lal v Kumar [2007] FJHC 140; HBC213.1994 (25 January 2007)

IN THE HIGH COURT OF FIJI
AT LAUTOKA

CIVIL ACTION NO 213 OF 1994

BETWEEN

RAVIND MILLAN LAL, ADRIAN AMAN LAL, AKESH RAVINDRA LAL, ARCHANA LAL
Plaintiffs

AND

DEO KUMAR & OTHERS
1st to 5th Defendants

AND

LAND TRANSPORT AUTHORITY
6th Defendant

Appearances: Mishra Prakash for the plaintiff/respondents
Vuataki Qoro for the 6th defendant/applicant

Date of Hearing: 12 December 2007
Date of Decision: 25 January 2007

DECISION
(Stay Application)

[1] The 6th defendant, Land Transport Authority of Fiji (LTA) by motion filed on 30 October 2007 seeks an order to stay the decision of Mr. Justice Connors of the 22 June 2007. The application is supported by the affidavits of William Wong sworn on 4 December 2007 and Isikeli Lagilagi sworn on 30 October 2007.

[2] The application is strongly opposed. The plaintiff chose not to file an answering affidavit.

Background

[3] The plaintiff’s writ was issued on 8 August 1994. The claim was originally for damages
for death and personal injuries after a collision between two motor vehicles on 17 August 1991. Judgment in liability was entered against the first three defendants, being the driver and owners of the other vehicle, on 30 November 1998. Subsequently the Attorney General was joined in respect of a claim against the Police and the LTA was joined in a respect of a claim against its predecessor, the Transport Control Board. The matter came up for hearing before Justice Finnigan on 17 July 2006. The LTA had taken no steps in the action and Justice Finnigan granted the plaintiffs application and entered judgment in liability by default against the LTA. The hearing proceeded before Justice Finnigan as a hearing of assessment of personal injury damages primarily against the 1st, 2nd and 3rd defendants. Judgment against the 1st, 2nd and 3rd defendants was delivered on 22 August 2006. In total the plaintiffs were awarded compensation in the sum of $884, 272.

[4] In a further ruling on 26 January 2007, his Lordship granted leave to the plaintiffs to amend their statement of claim against the LTA.

[5] The amended statement of claim was heard by Justice Connors in May 2007. In his judgment of 22 June 2007, Justice Connors found interalia that the LTA owed to the plaintiff a duty of care and that it breached that duty in failing to fulfill its statutory obligations as to the Motor Vehicle (Third Party) Insurance at the time that the motor vehicle registration was effected or renewed. His Lordship found that the LTA by virtue of its breach of statutory duty steps into the shoes of the third party insurer and was accordingly liable to the plaintiff for damages determined by Justice Finnigan in his judgment of 22 August 2006 and entered judgment against the LTA for the amounts as determined by Mr. Justice Finnigan. The LTA have filed an appeal against the judgment of Mr. Justice Connors.

The relevant principles on a stay application

[6] The relevant principle for consideration on applications for stay pending appeal were recently enunciated by the Fiji Court of Appeal in Natural Waters of Viti Ltd. –v- Crystal Clear Mineral Water (Fiji) Ltd. [1]. The Court held as follows:

"The principles to be applied on an application for stay pending appeal are conveniently summarized in the New Zealand text, McGechan on Procedure (2005):

"On a stay application the Court’s task is "carefully to weigh all of the factors in the balance between the right of a successful litigant to have the fruits of a judgment and the need to preserve the position in case the appeal is successful": Duncan –v- Osborne Building Ltd (1992) 6 PRNZ 85 (CA), at p 87.

The following non-comprehensive list of factors conventionally taken into account by a Court in considering a stay emerge from Dymocks Franchise Systems (NSW) Pty Ltd –v- Bilgola Enterprises Ltd (1999) 13 PRNZ 48, at p 50 and Area One Consortium Ltd –v- Treaty of Waitangi Fisheries Commission (1993) 7 PRNZ 200:

(a) Whether, if no stay is granted, the applicant’s right of appeal will be rendered nugatory (this is not determinative). See Phillip Morris (NZ) Ltd –v- Ligget & Myers Tobacco Co (NZ) Ltd [1977] 2 NZLR 41 (CA).

(b) Whether the successful party will be injuriously affected by the stay.

(c) The bona fides of the applicants as to the prosecution of the appeal.

(d) The effect on third parties.

(e) The novelty and importance of questions involved.

(f) The public interest in the proceeding.

(g) The overall balance of convenience and the status quo."

[7] I comment briefly on such of those factors as may be relevant in the present case.

Whether, if no stay is granted, the applicants right of appeal will be rendered nugatory

[8] The Court of Appeal held that this was not determinative. Mr. Wong contends in his affidavit that "there is a real risk that the plaintiffs would not be in a position to repay the said sum if LTA’s appeal is successful next year". The statement is based on his belief that the plaintiffs do not have the means to repay such a large amount of money. He believes that the plaintiffs are unemployed. The source of his belief was not disclosed. Mr. Lal who sued on his own behalf and on behalf of his infant children did not file an answering affidavit, a course which he was entitled to take especially given deficiencies in the application. In the course of the hearing, I indicated to LTA’s counsel that the evidence adduced by LTA to show that the plaintiff would be unable to repay monies paid out should the appeal be successful, was inadequate. In a stay application, the onus of establishing inability to repay, lies with the applicant. It has been held that this burden will not be discharged unless the applicant "condescends to particulars".[2] The LTA has not disclosed the requisite particulars. Given the significant compensation award this factor is important. Although the information made available for assessment of this factor is wholly insufficient, there is material available on record which I can draw on to assist in determining whether the LTA’s concerns have any merit.

[9] In the judgment on Quantum of Damages delivered on 22 August 2006, Justice Finnigan found that Mr. Lal, "had been reduced to virtual total dependency," as a result of the injuries he sustained in the motor vehicle accident giving rise to the proceedings.[3] Justice Finnigan found that Mr. Lal’s brother-in-law, Mr. V. Sharma, had to pay for his hospital and transport expenses for him and his children’s school fees. He found that Mr. Lal has mental deficiencies and cannot even speak very clearly or think as he used to. Given these findings, which I take judicial notice of, I have concluded that LTA would suffer possible irreparable financial loss if monies were paid out. Given Mr. Lal’s state of dependency, the risk of irrecovery is not remote. It is a very real risk which I must take into account. In these circumstances I have upheld the applicants submission that if no stay is granted, the LTA’s right of appeal will be rendered nugatory. The risk that LTA cannot be re-instated to its previous position if monies are paid out is far too obvious to ignore.

Whether the successful party will be injuriously affected by the stay

[10] Obviously the plaintiffs will be affected by being kept out of the proceeds of judgment. There has been significant delay in finalization of the claim, which is likely to be aggravated by the pending appeal.

The bona fides of the applicants as to the prosecution of the appeal

[11] Although it is not desirable to assess the merits of the grounds of appeal, prima facie it is apparent that the appeal is clearly arguable and is neither wholly unmeritorious nor wholly unlikely to proceed.

The effect on third parties

[12] The LTA contends that if a stay is not granted, its finances would be impacted to the extent of affecting its operations and meeting it’s administrative and financial commitments. A substantial detrimental impact on the sustainability of it’s operations would result, it claims. Again the evidentiary basis of this contention has not been sufficiently traversed. Nevertheless I take into account the important public function the LTA is mandated to undertake. A significant impact on it’s operational costs may affect its functions and that is also a factor I take into consideration when balancing the competing interests of the parties.

The novelty and importance of questions involved

[13] In my view, the points of law involved in the appeal are not only novel but are also of general public importance. Of critical significance is the issue surrounding the finding that as a consequence of a breach of statutory duty, the LTA steps into the shoes of the third party insurer and is liable to a plaintiff for damages arising in an action grounded in negligence. A further issue of importance is the question of joinder and amendment well after expiry of the limitation period.

The overall balance of convenience and status quo

[14] The test here is a determination of which of the two parties will suffer greater harm from granting or refusal of an interim stay pending a determination of the appeal on merits. A balancing of conflicting considerations is required, between the underlying principle that a litigant is entitled to the fruits of his judgment forthwith and the obvious injustice in refusing a stay where such a refusal will render the appeal nugatory or substantially nugatory.[4] The loss or prejudice that each party alleges it is likely to suffer has been comprehensively addressed in the written submissions filed. I have no hesitation in concluding that if the application was refused and the appeal is successful, the LTA will suffer considerable irreparable loss if the judgment sum or even a portion of it was paid out to the plaintiffs. There is an appreciable risk, given the impecuniosity of the plaintiff that monies paid out would be irrecoverable. On the other hand, if the appeal is unsuccessful, LTA has the resources to pay the judgment sum.

Conclusion

[15] In my view, the LTA will suffer greater prejudice (if the application is refused) than the plaintiff (if it is granted). The balance of convenience demands that the status quo he maintained. I am satisfied that the applicant’s appeal will be rendered nugatory or substantially so if a stay is not granted. In arriving at this conclusion, I have borne in mind what was said in Wilson –v- Church, (1879), 11ChD 576CA quoted by Sir Moti Tikaram in Reddy’s Enterprises [5].

"Where an unsuccessful party is exercising an unrestricted right of appeal, it is the duty of the court in ordinary cases to make such orders for staying proceedings under a judgment appealed from, as would prevent the appeal, if successful, from being nugatory. But the court will not interfere if the appeal appears not to be bona fide, or there are other sufficient exceptional circumstances."

I have also borne in mind the general rule that the Court does not "make a practice of depriving a successful litigant of the fruits of litigation, and locking up funds to which prima facie he is entitled" pending appeal. (The Annot Lyle [1886] UKLawRpPro 31; (1886) 11 PD, 114, 116, CA; Monk v. Bertram (1891) 1QB, 346).

[16] The delay in filing this application will result in a cost order against LTA.

Orders

1. The judgment of 22 June 2007 is stayed pending appeal.

2. The applicant is to pay costs of the application assessed in sum of $500.00.

Gwen Phillips
JUDGE

At Lautoka
25 Januray 2008

^[1] FCA Civil Appeal No. ABU 0011 of 2004S (18 March 2005) page 3
^[2] Peter Elsworth + Anr. –v- Yanuca Island Ltd. HBC 0157.97L
^[3] Page 10 of the Judgment
^[4] Reddy’s Enterprises Limited –v- The Governor of the Reserve Bank of Fiji [Court of Appeal, 1991 (Tikaram RJA) 9 August at page 87
^[5] Supra at p. 88