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Facciola v Nasau [2011] FJHC 330; HBC64.2010L (7 June 2011)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 64 of 2010L

BETWEEN:

ROBERT MAURICE FACCIOLA
as Trustee for THE ROBERT MAURICE FACCIOLA TRUST
Plaintiff

AND:

RATU TIMOCI NASAU
1st Defendant

AND:

PROFESSIONALS WEST REALTY FIJI LTD
2nd Defendant

INTERLOCUTORY JUDGMENT

Judgment of: Inoke J.

Counsel Appearing: Ms M Muir (Plaintiff)
Mr P Lowing (2nd Defendant)

Solicitors: MK Sahu Khan (Plaintiff)
Lowing & Assocs (2nd Defendant)

Dates of Hearing: 3 May 2011
Date of Judgment: 7 June 2011

INTRODUCTION

[1] This is the second defendant’s application for stay pending appeal of my judgment delivered on 10 March 2011 after open court hearing on 12 – 14 October 2010. That judgment is reported in Facciola v Nasau [2011] FJHC 156; HBC64.2010L (10 March 2011).

[2] I made the following orders:

1. The sum of $940,000 paid into Court and held by the Court shall be released to the Plaintiff, Robert Maurice Facciola, or at his direction, forthwith without deduction or retention.
   
2. The First and Second Defendants, jointly and severally, shall pay to the Plaintiff, Robert Maurice Facciola, or at his direction, the sum of $117,500 as interest on the above sum.
   
3. The First and Second Defendants, jointly and severally, shall pay to the Plaintiff, Robert Maurice Facciola, or at his direction, the sum of $20,000 as costs within 28 days.
   
4. The First and Second Defendants' counter-claims against the Plaintiff are dismissed.
   
5. The First and Second Defendants have leave to pursue their respective claims against each other elsewhere and as they see fit.
   

[3] The proposed appeal is against orders 2 and 3. The appeal is to be lodged by the second defendant. The first defendant has not taken part in this application or in the action since appearing at the trial.

THE PROPOSED GROUNDS OF APPEAL

[4] There are 14 proposed grounds of appeal. The main grounds of appeal is that I erred in fact and law in finding that the first defendant had express or implied authority to bind the second defendant when in fact the second defendant was simply an agent of the first defendant. Examination of my judgment reveals[1] that I found the plaintiff and the first defendant relied on the expertise of the second defendant in signing the purported sale and purpose agreement rather than a finding of express or implied authority or failing to consider that the second defendant was the real estate agent of the first defendant. The other grounds of appeal relate to my findings of fact which the second defendant says were errors of fact and law. I note that there is no ground of appeal against my finding that under the provisions of the Native Land Trust Act, particularly ss 5 and 16(1), the purported sale and purchase agreement was null and void ab initio therefore did not give any rights to the second defendant to claim the deposit and commission, other than a general ground that I erred in fact and law for dismissing the defendants’ counter claim.

THE AFFIDAVIT IN SUPPORT

[5] Ms Carol West, director and shareholder of the second defendant, swore the affidavit in support of the application. She says if the stay is not granted the appeal will be rendered nugatory because the plaintiff is an American citizen and resident and she has been advised that the legal costs of proceeding for recovery of the amount through the American courts would be prohibitively expensive. Secondly, she says the second defendant would suffer great prejudice because if payment is not stayed it would effectively bankrupt her company.

THE LAW

[6] The law on stay pending appeal is set out by the Court of Appeal in Natural Waters of Viti Ltd v Crystal Clear Mineral Water (Fiji) Ltd [2005] FJCA 13; ABU0011.2004S (18 March 2005) as follows:

“Principles on a stay application

[7] The principles to be applied on an application for stay pending appeal are conveniently summarised 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 Philip Morris (NZ) Ltd v Liggett & 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] Ms Muir cited, with emphasis, a more recent decision of a Marshall JA of the Court of Appeal decision in Attorney General of Fiji v Dre [2011] FJCA 11; Misc.13.2010 (17 February 2011) to the effect that:

"46. What probably always has been relevant to these stay applications but is now expressly so in view of the Hong Kong cases cited from the Hong Kong White Book 2007 at paragraph 24 above, is the negative chances of success of the appellant. The policy behind, "not denying the Plaintiff the fruits of his judgment" is the experience of the law that many litigants, will appeal any judgment until finality on any grounds in order to postpone the day of paying out. Too often delay is the name of the game. So it has probably always been correct to say that there will be no special reasons based on the Plaintiff's lack of means to repay or otherwise where on examination of the Defendants' chances of success on appeal the decision maker concludes that they are low to non-existent. The Defendant should not be appealing because he does not have strong grounds; the fact that he has low to non-existent chance of success in his appeal must determine his application for a stay against him."

[8] I would prefer however the approach adopted by Sir Moti Tikaram JA in Reddy's Enterprises Ltd v Governor of the Reserve Bank of Fiji [1991] FJCA 4; Abu0067d.90s (9 August 1991):

In requiring the Applicant to establish special circumstances in this case I am not to be taken to hold that in all applications for a stay it shall be incumbent on the Applicant to show special circumstances in the traditional sense. I subscribe to the view that adherence to an inflexible rigid test to all types of stay or injunction cases without considering their nature is not to be favoured. The strict test rule can negate the wide discretion vested in Courts and could even lead to denial of justice in particular cases.

APPLICATION OF THE LAW TO THIS CASE

[9] Although no evidence was put before me as to the cost of litigation in America I do accept that there could be considerable cost and inconvenience should the plaintiff decide not to cooperate in having the judgment sums paid back into Fiji. I also accept that the payment could be a heavy financial burden on the second defendant if it is required to pay the total sum of $117,500 (interest) and $20,000 (costs) now. On the other hand, the plaintiff will not suffer any loss or prejudice by having to await the appeal. Any such loss can be compensated in interest and on Ms Carol West's personal undertaking as to damages given in her affidavit in support.

[10] Although I have grave doubts as to the second defendant's prospects of success on appeal in respect of the judgment on interest I do not have such doubts on the award on costs.

[11] In the circumstances therefore I propose to stay execution of the judgment on interest but not on the award on costs.

COSTS OF THIS APPLICATION

[12] Substantial affidavits and submissions have been filed for this application. I summarily assess costs of $1,500 to the plaintiff.

THE ORDERS

[13] The orders are therefore as follows:

(a) Stay of execution of order 2 of this court's judgment of 10 March 2011 for payment of $117,500 is granted pending the second defendant's appeal.

(b) Stay of execution of order 3 of this court's judgment of 10 March 2011 for payment of $20,000 is refused.

(c) The second defendant shall pay the plaintiff's costs of this application of $1,500 within 21 days.

............................................................
Sosefo Inoke
Judge

^[1] At para 68.