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Vucu v C & J Enterprises Ltd [2005] FJMC 19; Workmen's Compensation Cases No 7 & 9 of 2003 (26 January 2005)

IN THE FIRST CLASS MAGISTRATES’ COURT
WESTERN DIVISION AT LAUTOKA

W/ COMPENSATION CASES NO. 7 & 9 OF 2003

BETWEEN:

WAISAKE VUCU
MELI NAIKANITAGA
APPLICANTS

AND:

C & J ENTERPRISES LIMITED
RESPONDENT

Counsel for the Applicants: Mr V M Mishra
Counsel for the Respondent: Mr. R. Gordon

Date of Hearing: 12/01/05
Date of Ruling: 26/01/05

RULING

This is the respondent’s application for stay of execution pending the determination of appeal (although the respondent is the applicant in this application but for the sake of clarity I will refer to it as "the respondent" and I will refer to the original applicants (as "the applicants".)

I delivered my judgment in this case on 13/8/04 awarding a sum of $30,000 to each applicant namely; - Waisake Vucu and Meli Naikanitaga and awarded cost to them in the sum of $1,500 each. The applicants filed Writ of Fieri Facias on 31/8/04. On 22/9/04 the respondent filed an ex parte application for stay of execution of judgment and I granted an interim stay on 22/9/04 and adjourned the matter till 23/9/04. I was informed by the respondent on 22/9/04 that 3 motor vehicles seized were under mortgage debenture and the mortgage debenture was not produced to the Court till 28/9/04 when I ordered that all vehicles seized earlier should be released to the respondent and I further ordered the applicants to file affidavit in reply. The applicants choose not to file affidavit in reply. Mr Gordon has submitted that the applicants’ failure to file the affidavit in reply means that the applicants are deemed to have accepted the contents of the respondents affidavit whilst Mr Mishra submits that only contents which are true is deemed to be accepted and not the assertions. I agree with Mr Mishra. See: - Jai Prakash Narayan –v- Savita Chandra FCA Civil Appeal No. 37/85.

Mr Gordon for the respondent has argued that the stay of execution ought to be granted, and he has further submitted that even if the stay is not granted then the applicants would still not be able to execute the order under the Writ of Fieri Facias as all the assets of the respondent are charged under the mortgage debenture to the ANZ Bank. He also submitted that if stay is not granted then the respondents would be ruined and also if monies are paid out to the applicants then the respondent would have no chance of recovery at all as the applicants have no properties.

Mr Mishra has submitted that stay should not be granted as the applicants are entitled to their fruit of labour and one of the applicants namely Waisake Vucu is so sick that he may not survive the appeal process. Both counsels agree that the situation in the High Court at Lautoka is very bad and that the diary for this year is almost full. He further submitted that the mortgage debenture does not preclude the applicants from executing the Writ of Fieri Facias as the assets under the debenture is a floating security and since the ANZ Bank has not given any notice the charged has not crystallized and thus is open to the execution of the Writ of Fieri Facias. I agree that the assets are subject to the execution of Writ of Fieri Facias see: - Bank of Hawaii –v- Labour Office. Ministry of Labour –v- Nu-Star Clothing Company Ltd. High Court Lautoka Civil Appeal No HBA32 of 2001L unreported decision of Byrne J where he said as follows at page 8 –

"Much of what I have said on ground 2 applies to ground 3 but here it must be noted that the vehicles were secured in favour of the appellant under:-

1. A debenture dated 6 March 1996, being a charge over all the Assets and undertakings of the company;
   
2. A Bill of Sale dated 5 July 1996, being a charge over motor vehicle CW652; and
   

100. A bill of Sale dated 20 August, 1997, being a charge over motor

Vehicle CO590.

The prescribed particulars relating to these charges were duly registered with the Registrar of Companies and were before the Learned Magistrate. Also there was evidence before him that as at 12th April 2001, the Second Respondent was indebted to the Appellant in the sum of $71,102.52 (owing as at 31st March 2001) with further interest accruing thereon at the rate of 13% per annum from 1st April, 2001.

A Demand Notice dated 4th April 2001 was served on the Second Respondent on the 5th April 2001 but no payment has been made to the Appellant and consequently in my view the Appellant is entitled to possession of the vehicles and to deal with them in terms of the debenture and the Bills of Sale.

Consequently in my judgment the Magistrates’ Court has no power to order that they be sold to satisfy the wages debt of the employees."

The respondent has filed some 30 grounds of appeal and as I said in my judgment that this is indeed an unusual case of workmen’s compensation claim. This is not a case where there is a direct employer and employee relationship and no deduction for FNPF has been made but the overall circumstances of the case bore all the hallmarks of employer and employee relationship.

It cannot be disputed that the respondent would be unable to recover the monies should its appeal be successful. This is a factor which is indeed very relevant as it may render the appeal to be nugatory.

The grant of stay of execution is a discretionary matter and a court may grant stay either absolutely or such period and subject to such conditions as the court may think fit. See: - Peter Ernest Jones –v- Maurice Leicester Chatfield Suva High Court No. 7/1990.

In paragraph 19 of its affidavit dated 22/9/04 the respondent has said as follows:-

"That the Respondent Company is a solvent company and able to pay its just debts and dues. There is no reason why the enforcement and/or execution of the said judgments and/or orders cannot wait till the determination of the said appeals"

The Respondent’s only fear is that if the Writ of Fieri Facias is executed then it may be wound up by ANZ Bank. The respondent is obliged to make a full and frank disclosure and the onus is on it to do so. In this case the respondent has not made full and frank disclosure. Whilst on the one hand it has fears that the execution that the Writ of Fieri Facias may lead the ANZ Bank to institute Winding Up proceedings on the other hand it has said in paragraph 19 of the affidavit it has the ability to meet its just debts and dues and has further suggested that enforcement proceedings should wait until the determination of the appeal.

The applicants are entitle to their fruit of labour and since the respondent has failed to make full and frank disclosure it may well be that the respondent may not be able to pay its debts after the determination of the appeal.

In the circumstances the application for stay of execution is refused and I order that the respondent shall within 21 days pay into this court the sum of $63000.00 and I further order that the applicants are entitled to the costs of this application which I summarily access in the sum of $500.00.

Mohammed S. Khan
Resident Magistrate

26th January, 2005