Home | Databases | WorldLII | Search | Feedback High Court of Fiji

Bi v Ali [2011] FJHC 766; Civil Action 431.2007 (28 November 2011)

IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION

Civil Action No. 431 of 2007

BETWEEN:

JANIFA BI as the Administratrix of the Estate
of Mohammed Azam Ali
PLAINTIFF

AND:

REHANA ALI
FIRST DEFENDANT

AND:

JOSEPH ROBERT LAI TOO FONG
SECOND DEFENDANT

AND :

EASTWIND PTY LTD
THIRD DEFENDANT

AND:

ASCOT MOTORS PROPRIETORY LIMITED
FOURTH DEFENDANT

AND:

ALLSAFE SECURITY AND PROTECTION
PROPRIETORY LIMITED
FIFTH DEFENDANT

AND:

AZAM AND REHANA'S INVESTMENTS (PROPRIETORY)
LIMITED
SIXTH DEFENDANT

Appearances : Mr A.Singh for the plaintiff
Mr Parshotam for the defendants

Date of hearing: 7th October,2011

DECISION

1. Background
   

The plaintiff Janifa Bi is the widow and administrator of the estate of Mohammed Azam Ali.

Janifa Bi, Mohammed Azam Ali and their two daughters had acquired an Australian domicile in 1990. Mohammed Azam Ali and Janifa Bi separated in February, 1996, and property proceedings were filed by Janifa Bi in the Family Court of Australia. Mohammed Azam Ali had returned to Fiji in February,1997. In July,1998, he had commenced a de facto relationship with Rehana Ali, the first defendant. He died on 29 April, 2007.

The dispute between Janifa Bi and Rehana Ali was set in motion with the statement of claim filed by Janifa Bi on 13th September,2007. To recapitulate the primary facts, after the demise of Mohammed Azam Ali, Rehana Ali operated and managed the 3rd,4th,5th and 6th defendant companies,in which she and the deceased hold shares as follows:

Janifa Bi has sought orders that she be registered as a shareholder and be appointed a Director of the 3rd,4th, 5th and 6th defendant companies(Eastwind Group). She has also challenged the appointment of the 2nd defendant as a director of the said companies.
Rehana Ali, in her defence, stated these companies were set up by Mohammed Azam Ali, his father-in-law and herself. She counter-claimed that the deceased held all property in his name in trust for her .

On 4 November,2008, an interim injunction had been granted by Madam Justice Scutt restraining the defendants from selling, mortgaging or dealing with the assets of the
3rd,4th,5th and 6th defendants. The application for appointment of Janifa Bi as a receiver/manager of the 3rd,4th,5th and 6th defendants was refused.

2. The present applications
   

The matter rested there until the present . There are before me two motions for interim relief. The first is by the defendants. The second is by Janifa Bi.

On 9th September,2011, an ex parte notice of motion was filed by the defendants. The application was supported by an affidavit sworn by Evelyn Hing, a Personal Assistant in the employment of Parshotam & Co. It was alleged that on a complaint made by Janifa Bi to the Police, Rehana Ali was arrested and in custody. It was further alleged that Janifa Bi had moved into the business premises of the Eastwind Group at 49,Millet Road, Vatuwaqa, and taken control, resulting in the business been severely affected. It was also alleged three vehicles were confiscated by the Police.
On 9 September,2011, I granted ex parte an interim injunction that Janifa Bi:-

1. leave the commercial premises at 49 Millet St, Vatuwaqa .
2. be restrained from entering or in any way taking possession of the said premises.

100. return all property taken by her from the said property or any other place, the property of the defendants,

4. send a written request to the Fiji Police Force to return motor vehicles having registration numbers DY 222,DT 814 AND DN 836.
   

I directed that the application be mentioned inter partes on 14 September,2011, and Rehana Ali file an undertaking as to damages, which was complied with.On 14 September,2011, a second ex parte notice of motion was supported on behalf of the defendants on the ground, as stated in the affidavit of Rehana Ali, that Janifa Bi had taken steps to gain possession of two other businesses of the Eastwind Group at Lami and Walu Bay. The response of Mr Raman Singh, who represented Janifa Bi at the opposed ex parte proceedings, was that his client was entitled to do so, as administrator of the estate of Mohammed Azam Ali.

After hearing counsel, I extended order a) granted on 9th September, 2011,to the business premises at Lami and Walu Bay.

On 21st September,2011, Janifa Bi in turn, filed cross-summons for an inter partes injunction praying that she be permitted to have interim management of the relevant companies and the properties of the deceased, or alternatively, that she be permitted to install persons to the management of the companies.

The parties filed affidavits in reply and submissions.

Janifa Bi, in her affidavit in reply dated 19th September,2011, has stated she made a complaint to the Police regarding the affairs of these companies. She asserts further:

"My involvement with the Police has been at the request of the Police to administer the estate of my late husband.. and to take over the interim management of various companies during the cause of the investigation of the 1st Defendant. That my involvement in the management of the companies has only been motivated by my desire to assist the police in their investigation".(emphasis added)

In this context, Rehana Ali has stated that she was released from custody on 9 September, 2011, and has not been charged .

Janifa Bi's affidavit provides she became aware more recently, that Rehana Ali's accretion of the shares in her name in the Eastwind Group was upon a fraudulent transfer of shares from Janifa Bi's father-in-law, after his demise. The supporting evidence provides the transfer of shares preceded the grant of probate to his widow and was contrary to the Articles of Association of the 3rd defendant company. Be that as it may, the impugned transfer is the subject of separate legal proceedings instituted by the Administratix against Rehana Ali.

Rehana Ali, has averred that the actions taken by Janifa Bi to take over the business of the Eastwind Group has affected its staff, customers and bankers. Rehana Ali has appended copies of Bank statements depicting the overdrafts and guarantees given by herself.

The matters were taken up for hearing on 7th October,2011.

3. The determination
   

The interim reliefs sought by Rehana Ali are primarily mandatory in nature .
In Redland Bricks Ltd v Morris [1969] 2 AER 576 at pages 579 to 580, Lord Upjohn stating that " the grant of a mandatory injunction is entirely discretionary and unlike a negative injunction .. can never be "as of course", laid down the general principles to be considered in an application for a mandatory injunction as follows:

1. A mandatory injunction can only be granted where the claimant shows a very strong probability upon the facts that grave damage will accrue to him in the future...It is a jurisdiction to be exercised sparingly and with caution but, in the proper case, unhesitatingly.
   
2. Damages will not be a sufficient or adequate remedy if such damage does happen. This is only the application of a general principle of equity......
   
3. Unlike the case where a negative injunction is granted to prevent the continuance or recurrence of a wrongful act, the question of the cost to the defendant to do works to prevent or lessen the likelihood of a future apprehended wrong must be an element to be taken into account .
   
4. If in the exercise of its discretion the court decides that it is a proper case to grant a mandatory injunction,then the court must be careful to see that the defendant exactly knows in fact what he has to do...".
   

Madam Justice Shameem in Sahib v Commissioner of Police, [1999] FJHC 73, citing the above aphorism of Lord Upjohn stated the test for the grant of mandatory injunctions is " a far more stringent one than the American Cyanamid Co v. Ethicon Co Ltd [1975] 1 All E.R.504,test".

Lord Westbury in Isenberg v East India House Estate Co. Ltd [1863] EngR 1070; (1863),46 ER 637 at 641 [referred to in Halsbury, Laws of England (4th Ed),Vol 24,para 947] stated;

"...The exercise of that power is one that must be attended with the greatest possible caution. I think, without intending to lay down any rule, that it is confined to cases where the injury done to the plaintiff cannot be estimated and sufficiently compensated by a pecuniary sum."

In my judgment, Janifa Bi was not entitled to take control of the business, as she did. Rehana Ali has asserted the action of Janifa Bi affected the business of the Eastwind Group. The loss of business to a company cannot be quantified nor compensated by damages.

The written submissions filed on behalf of Janifa Bi state in conclusion, that she has no intention of returning to the business premises and that she has complied with the other interim orders of the court.

Rehana Ali in her affidavit, has confirmed however, that she has only re-secured possession of the premises at 49 Millet St, Vatuwaqa.

Accordingly, I order the interim reliefs granted by this court to be extended as set out below.

I will now proceed to revisit the application made before Madam Justice Scutt, to have Janifa Bi or alternatively, to have other persons as interim managers of the defendant companies. The reasons alleged by Janifa Bi in her second affidavit, is that the company is being managed contrary to the Articles of Association and the Order of Madam Justice Scutt. It is asserted that meetings of shareholders have not been held and shareholders have been denied a right to consider accounts, balance sheets, director's and auditors reports and to appoint directors.

These assertions do not in my judgment, constitute valid grounds to appoint Janifa Bi's nor any other person as interim manager of the defendant companies.

In this context, I quote an excerpt of an authority reproduced by counsel for the plaintiff in his submissions dated 14th March,2008, which provides instances when a court may appoint a receiver, viz:

"where the company is incapable of managing its own affairs by reason of the absence of a properly constituted board, or deadlock on the board of directors. .. where there is dissension on the board following misconduct or an irretrievable breakdown between the shareholders in a "quasipartnership" and a petition has been presented for the winding up of the company or under section 459 of the Companies Act 1985 claiming that the affairs of the company have been or are being conducted in a manner which is unfairly prejudicial to the interests of the members or some of them ."- Lightman and Moss. The Law on Receivers and Administrators of Companies by at page 413. (emphasis added)

In my view, Madam Justice Scutt,in considering the selfsame relief sought, correctly held

"that the appointment of a receiver, whether Ms Bi or anyone else, would be detrimental to the Eastwind Group and indeed to all the parties – Ms Bi included.

That is, the appointment of a receiver would signal loudly that the Eastwind Group is 'in trouble'."

Upon considering the matter anew, in my judgement, Janifa Bi's application is unfounded.

As regards Janifa Bi's concerns, Rehana Ali has averred that she recognises that Janifa Bi needs to be apprised of the financial activities of the Eastwind Group and would provide copies of financial statements, as she claims she has done.

4. Orders
   
5. I make the following orders :
   
   1. I set aside the ex parte order granted in a) on 9th September,2011.
   2. That until judgment in the action or further order, the ex parte orders b), c) and d) granted on 9th September,2011, remain in force.
   3. That until judgment in the action or further order, the orders granted on 14th September,2011, directing the plaintiff to leave the businesses premises of the Eastwind Group at Lami and Walu Bay remain in force, in the event she has not left these premises.
   4. The plaintiff's application for the appointment of interim management of the 3rd,4th, 5th and 6th defendant companies or alternatively, that she be permitted to install persons to the management of the companies is refused.
   5. The plaintiff is to pay the defendants costs in the sum of $ 2,500 summarily assessed.
      

A.L.B. Brito-Mutunayagam

Judge

28th November 2011