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Stantec New Zealand Ltd v Fiji Roads Authority [2019] FJHC 198; HBC324.2016 (1 March 2019)

IN THE HIGH COURT OF FIJI AT SUVA

CIVIL JURISDICTION

Civil Action No. HBC 324 of 2016

BETWEEN

STANTEC NEW ZEALAND LIMITED a company incorporated in New Zealand

and having its place of business as Kadavu House Level 2, 414

Victoria Parade, Suva and having a local agent MWH.

PLAINTIFF

AND

FIJI ROADS AUTHORITY a statutory body established under the

Fiji Roads Authority Decree No.2 of 2012 as amended of

Fiji Development Bank Building Level 4, 360

Victoria Parade, Suva.

DEFENDANT

Civil Action No. HBC 227 of 2017

BETWEEN

FIJI ROADS AUTHORITY a statutory body established under the

Fiji Roads Authority Decree No. 2 of 2012 as amended of

Fiji Development Bank Building Level 4, 360

Victoria Parade, Suva.

PLAINTIFF

AND

STANTEC NEW ZEALAND LIMITED (NZBN 9429040356297) a company

incorporated in New Zealand and having its place of business as

Kadavu House Level 2, 414 Victoria Parade,

Suva and having a local agent MWH.

FIRST DEFENDANT

AND

MICHAEL STWPHEN RUDGE of B41/10 Ebor St. Te Aro, Wellington,

New Zealand.

SECOND DEFENDANT

AND

BRUCE BUXTON of 324 Brighton Road, Waldronville,

Dunedin 9018, New Zealand.

THIRD DEFENDANT

AND

ANDREW MACNIVEN CASELEY of Apartment li,

Montreaux Apartments, 164 The Terrace,

Wellington, New Zealand.

FOURTH DEFENDANT

Counsel : Mr D. Salmon with Mr D. Bullock and Ms P. Low for the

Plaintiff in HBC 324 of 2016 and for the defendants in

HBC 227 of 2017.

Mr D. Sharma with Mr S. Deo for the defendant in HBC

324 of 2016 and for the plaintiff in HBC 227 of 2017.

Date of Hearing : 13^th February, 2019

Date of Ruling : 01^st March, 2019

JUDGMENT

[1] The plaintiff instituted these proceedings by an originating summons seeking the following reliefs;

(a) A declaration that clause 10 of the agreement for the provision of road management services in Fiji between the Plaintiff and the Defendant dated 27th January, 2012 (Agreement):

1. continued in effect after termination of that Agreement; and
2. continues to bind the defendant.

(b) A declaration that the Plaintiff is entitled to submit the dispute (as defined in the Affidavit in support of the Originating Summons) for mediation as required by clause 10.2 of the Agreement;

(c) By reason of the matters referred to in (a) and (b) above an order for specific performance of clause 10.2 of the Agreement, namely, the selection of a mediator of the Dispute by Chief Justice of Fiji; and

(d) Costs.

[2] There is another matter (HBC 227 of 2016) before this court between the same parties wherein the plaintiff seeks an order staying the proceedings. The originating summons and the application for stay were taken up for hearing together.

[3] Clause 10.1, 10.2 and 10.4 of the agreement read as follows;

10.1 In the event that any dispute or difference of any kind between the parties in connection with or arising out of this agreement arises (“Dispute”), the parties will attempt in good faith to settle such dispute by mutual discussion between the chief executive officers of each party held within 20 business days (or 10 business days if the Dispute relates to an invoice) after the date that the disputing party gives notice of the dispute to the other party identifying the dispute in reasonable detail and requesting consultations between the parties to resolve the Dispute.

10.2 If, at the end of such 20 business day (or, 10 business day) period, the Dispute is not resolved, either party may submit may submit the Dispute for mediation. If the parties cannot agree a mediator within 5 business days of the submission of the dispute for mediation, a mediator will be chosen by the Chief Justice of Fiji. The mediator shall fix the time, place and procedure for mediation but in any event, the mediation shall commence within 10 business days of appointment of the mediator.

10.4 If the dispute cannot be resolved within 15 business days of the commencement of mediation (or within any extended time agreed to in writing between the parties), the mediation shall cease and either party may submit the Dispute for Arbitration in accordance with the then existing rules and regulations of the Rules of conciliation and the Arbitration of the International Chamber of Commerce. Judgment upon the Arbitrator’s award shall be final and binding and may be enforced by any court of competent jurisdiction. The prevailing party in any action arising under this Contract shall be entitled to its costs of litigation, including reasonable legal fees.

[4] There is no dispute between the parties that clause 10 of the agreement continues to bind the parties even after the termination of the contract. Clause 12.8 of the agreement provides that the provisions of clauses 2.11, 5, 6, 9 and 10 shall continue in effect after termination of the agreement.

[5] The second relief prayed for by the plaintiff is a declaration that it is entitled to refer the dispute for mediation as required by clause 10.2 of the agreement.

[6] Both Mediation and arbitration are methods of alternative dispute resolution. Clause 10.2 does not require the parties to refer disputes for mediation or arbitration. However, it confers a direction on the parties to refer any dispute for mediation at first and if it is not successful to refer the dispute for arbitration. The word used in both instances in the agreement is “may”. There is no absolute requirement for the parties to refer any dispute for mediation or arbitration. Clause 10.2 of the agreement provides that the parties may first refer the dispute for mediation and clause 10.4 of the agreement provides that if the dispute is not resolved within 15 days or within any extended time agreed to in writing by the parties either party may refer the dispute for arbitration.

[7] The learned counsel for plaintiff in HBC 324 of 2016 submitted with many authorities seeking an order that the matter be referred for arbitration. The court is only entitled to grant reliefs specifically prayed for by the parties. There is no prayer for an order to refer the dispute between the parties for arbitration. As I stated earlier in this judgment both mediation and arbitration are methods of alternative dispute resolution. However, if there is an arbitration clause in an agreement the parties are bound to refer any dispute for arbitration but it is different in cases where there is provision for mediation. The parties cannot be compelled refer a matter for mediation and it has to done of consent. Even the court has no power to compel the parties refer a dispute for arbitration. That may be the very reason why the agreement has conferred a discretion on the parties to refer a dispute of mediation.

[8] The plaintiff in HBC 324 of 2016 seeks an order for specific performance of clause 10.2 of the agreement.

[9] A decree of specific performance is a decree issued by the court compelling a party to do what he has promised to do. It is a form of relief that is purely equitable in origin and is one of the earliest examples of the maxim that equity acts in personam.

[10] It originated in the realisation that there are many cases in which the remedy available at common law is not adequate. The normal remedy for breach of contract is the recovery of damages at common law. In most cases this affords adequate reparation, as, for example, where the contract is for sale of goods easily procurable elsewhere, or for the delivery of stocks or shares for which there is a free market; but in many instances and especially where a vendor refuses to convey the land sold, a mere award of damages would defeat the just and reasonable expectations of the plaintiff. The fundamental rule, therefore is that specific performance will not be decreed if there is adequate remedy at law. The purpose of such a decree is to ensure that justice is done.

[11] In the case of Flint v Brandon (1803) 8 Ves (Vesey Junior's Chancery Reports) 159 the Master of Rolls explained the position as follows;

This court does not profess to decree a specific performance of contracts of every description. It is only where the legal remedy is inadequate or defective that it becomes necessary for courts of equity to interfere... In the present case complete justice can be done at law. The matter in controversy is nothing more than the sum it will cost to put the ground in the condition in which by the covenant it ought to be.

[12] In view of the above the court cannot grant an order for specific performance of clause 10.2 of the agreement and compel the parties to refer the dispute between them for arbitration or for mediation. This is not something that the defendant promised to do but an understanding that they may refer any dispute arising out of the agreement for mediation and if it cannot be resolved by mediation for arbitration.

[13] Since this court has decided above that it does not have power to refer the dispute for mediation the question of appointing a mediator by His Lordship the Chief Justice will not arise for consideration.

[14] In HBC 227 of 2017 the 1^st defendant who is the plaintiff in HBC 324 of 2016, and other defendants in in HBC 227 of 2017 filed an application seeking inter alia, the following reliefs:

1. The proceedings be stayed, pursuant to section 5 of the Arbitration Act, alternatively pursuant to inherent jurisdiction of the High Court.
2. In the alternative to order 1, the proceedings be stayed until the determination of Civil Action No. 324 of 2016 pursuant to Order 4 of the High Court Rules 1988, alternatively pursuant to the inherent jurisdiction of the High Court.

[15] Since the substantive matter in Civil Action No. HBC 227 of 2017 will be finally disposed of with the delivery of this judgment the 2^nd relief prayed for above is not required to be considered.

[16] Section 5 of the Arbitration Act 1965 provides:

If any party to a submission, or any person claiming through or under him, commences any legal proceedings in any court against any other party to the submission, or any other person claiming through or under him, in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, apply to the court to stay the proceedings, and that court, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the submission and that the applicant was at the time when the proceedings were commenced and still remains ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings.

[17] In this matter as I have observed there is no application to refer the matter for arbitration. Without making an application the plaintiff has sought an order for specific performance which I have decided to refuse. Therefore, 1^st order sought must necessarily fail.

[18] The court accordingly, makes the following orders.

ORDERS

1. The Originating Summons in HBC 324 of 2016 is struck out and orders sought therein are refused.
2. The orders sought in the application for stay in HBC 227 of 2017 are also refused.
3. The plaintiff in Civil Action No. HBC 324 of 2016 is ordered to pay $3000.00 to the defendant (Fiji Roads Authority) as costs.
   

Lyone Seneviratne

JUDGE

01^st March, 2019