Home | Databases | WorldLII | Search | Feedback High Court of Solomon Islands

Panga v Yee [2011] SBHC 156; HCSI-CC 109 of 2010 (6 December 2011)

IN THE HIGH COURT OF SOLOMON ISLANDS.
(Faukona J).

Civil Case No.109 of 2010.

BETWEEN:

STEPHEN PANGA
Claimant

AND:

PAUL YEE
First Defendant

AND:

DIAMOND COPORATION
Second Defendant.

Date of Hearing: 1st December, 2011.
Date of Hearing: 6th December, 2011.

Mr W. Rano for the Claimant
Mr A. Radcliffe for the First Defendant
Mr P. Afeau for the Second Defendant.

RULING.

Faukona J: This application was filed by the Second Defendant on 8th November 2011, pursuant to Rules 2.8 and 7.3.

2. The relief sought is restraining and preservation orders as outline in the application.

3. On the outset Mr Afeau submits by way of clarification that this application is not supported by a sworn statement as normally required by Rule 7.5 (b). I noted that the person perhaps entitled to depose sworn statement is residing overseas; and is quite difficult to get instructions to compile a sworn statement. Despite that difficulty Mr Afeau rely on the exception in Rule 7.5 (b) (ii) that the facts rely on is common, has become documents already file in Court. In other words these facts which have already been known to the Court. Those facts refer to are stated in index of agreed facts and index of disputed facts.

4. The Second Defendant is the applicant in this action and is a company incorporated in Solomon Islands under the Companies Act, and carries on business of real estate.

5. The Claimant is an individual person suing under his own name.

6. The subject of the litigation is a property of FTE in Parcel No. 191-023-115 together with a two storey commercial building located next to the Central Magistrates Court.

7. Perhaps it is relevant to note that this case was instituted on the basis that the Claimant is seeking transfer of certain shares of Second Defendant company to his name according to their verbal agreement.

Second Defendant's Case:

8. The Second Defendant's case is that it was the registered owners of Fixed term Estate in the property. As a legal owner, it excised ownership right by signing tenancy agreement with Solomon Islands Government for monthly rental of top floor of the building for 2 years commencing 1st February 2004. After the two years, the tenancy agreement was renewed. The Second Defendant still maintained its rightful position as Landlord. On the third purported renewed of agreement which was to commenced on 1st February 2008 to the end of February 2010, amazingly the Claimant signed the agreement as Landlord. The next tenancy agreement which expired after two years was renewed which the claimant also signed as the Landlord. Again the Second Defendant describes such action as an act of misrepresentation which it did not authorize to sign on its behalf. Nothing was passed by any Board resolution authorising the Claimant to sign the agreement. In signing the tenancy agreement the Claimant has been using the money for his personal use without accounting for it to the Second Defendant; the legal owner of the property. Total received as rental for four years tenancy agreement is $2,424,000.00. Therefore Claimant should be restrained for collecting rentals and signing further tenancy agreement in the future until the substantive issue is determined.

The Claimants Case

9. The Claimant's case is that he was offered to pay the estate in the parcel no 191-023-115 by the Commissioner of Lands on 28th July 1995. He paid the $10,000.00 as required on 31 July, 1995, and a receipt was issued to that effect, see index book of disagreed facts. Thereafter a partnership between the Claimant and First Defendant concluded by signing a proposal document on 25th July, 1995. Subsequently following some oral agreements and authorisation by Paul Yee the tenancy agreement was signed by the Claimant on 1st February 2008 for two years, and further signed for further two years on renewal on 1st February 2010.

10. With that back drop facts Mr Rano submits that this application failed to comply with Rules 7.14 to 7.22 in many different ways. He says the application is not supported by any sworn statement, an important requirement. The application fails to identify what the nature of assets are. There is no undertaking to indemnify against any liability to meet any expenses the Claimant incurred. There is no draft order present to Court and parties of the relief sought. The Second Defendant merely relies on evidence from the index of agreed and disagreed facts. Court should be cautious in treating such evidence which is meant for trial. This is not trial. Mr Rano refers to a number of case authorities which I will refer to later.

11. The question to ask is, has this application complied with requirements of the Rule in form and set out. The relevant Rules as I suppose are Rules 2.8, 7.3, and Rules 7.14 – 7.22.

12. In all respect the first and foremost question one would ask why the application is not supported by a sworn statement as required by Rules 7.5 (b) and 7.18 (f) (i). Noted from Rule 7.5 that a written application must be supported by sworn statement. However the word "unless" used in paragraph (b) give alternative circumstances in (b) (i) and (b) (ii) where sworn statement may not be necessary be filed. In this case the Claimant opted for (b) (ii) which stated that facts he would rely on have already being known to the Court in materials as index of agreed facts and index of disputed facts. I accepted that the filing of this application is within the bound of the Rules and proper in all respect.

13. The next requirement which ought to be considered under the Rules is to give undertaking for liability to secure any loss and damages to the other party, the Claimant. Mr Rano refers to three cases which deal with the issue of undertaking. They are; Z Ltd v A and others[1]; Third Chandris Shipping v Unimarine[2] and Ninemia Corp v Trave Schiffahrts[3]. Those cases deal with applications for mareva injunction. Mr Rano argues that interlocutory application for freezing order is correspondingly the same as application for mareva injunction. It may be true in principle but in application differ from case to case. However, that is not a point of contention. The fact is that most requirements which ought to be complied with before mareva injunction is granted were entrenched in our current Rules. And that has to be complied with before restraining order be made. I agree with Mr Rano on this point.

14. In any event I rely on the case of Allen and others v Jambo Holdings and others[4], which the Court held that;

"... the issue of mareva injunction not to be determine solely by a plaintiff's financial standing. Each case the issue of an injunction depend on the balance of justice and convenience..".

15. In this case receiving rental revenue is a simple achievement without any sacrifice and over-head expenditure. As such, is different from the understanding normally expected in application for injunctive orders in logging cases. Neither the Claimant nor the Second Defendant contemplates incurring loss if the restraining order is given, and either of them losses the case. Simply put, if such order is given the money will be deposited in a joint bank account in the name of both counsels, until the case is finally determined. For the period of the interim order it is foreseeable that neither party will incur any loss or damages that actually require undertaking. The money will be safe and well secured. At the same time generating interest. In my view, undertaking is not necessary at all in this case. Here I am considering justice of the case.

16. The issue whether there is need to identify other assets the second Defendant has is irrelevant. The asset being the concern of this application is clear. It is well enumerated in the index of agreed documents. The same goes to filing of a draft order. That is not a strict rule to comply with rather it proposes a guideline for good practice. To avert it is perceived as very minimal to severe, or contribute to dismissal of any application under consideration.

17. It is well establish that application for interim restraining order, the applicant must act promptly. That is emphasised in Kofela v Sange[5]. This case commenced by filing the claim on 29th March 2010. This application was filed on 8th November 2011. However, it is a question as to when the Second Defendant leant that Claimant had been receiving rental money from the property. Unless a sworn statement is deposed by the Second Defendant, that cannot be verified for now. In any event the issue of prompt action play a minor role in this case. The reality is there is material which shows the Second Defendant is the legal owner of the property. He is entitled to enjoy and fully utilise and benefit from what rightly belongs to him. Whether this application is delay, late or without prompt action there has to be a determination on what he thought to have been gone wrong.

18. The case of Elima v Everbright Commercial Enterprise Pty Ltd[6] adopted the principles in two English cases it refers to on page 12 paragraph 1, it states;

"The cases establish that the applicant/plaintiff need not to show a very strong case, an arguable case is good enough and that the existence of bank account was enough prof of funds".

19. From documents on file there can be no doubt that the Second Defendant has a strong and arguable case which ought to proceed to trial of the issues. And whilst awaiting trial it is considered absolutely necessary that a restraining and freezing order is in place as an interim measure. With the authority of Elima's case I must grant the application.

Orders.

1. Interim order restraining the Claimant his servants agents and persons acting pursuant to or under the authority of the Respondent from:-

(a). Demanding, requesting, collecting or receiving any rental payments from any tenant whatsoever, including Solomon Islands Government for the use and occupation of the Top Floor of one Building Premises in Parcel No. 191-023-115 (refer to as "Property").

(b). Entering into any further tenancy agreements or renewal tenancy agreements whatsoever, whether on behalf of the Second Defendant or not for the use and occupation of the Property by any tenant.

2. An Order that all rental by tenants for the use and occupation of the Property shall be paid into Solicitors Trust Bank Account opened in the joint names of the Claimant's and Second Defendant's Solicitors.

3. Cost of this proceeding be paid to the First and Second Defendants.

4. Case be fixed for mention in mid February 2012 by listing Coordinator.

The Court.

^[1] [1982] 1 ALL ER
^[2] [1979] 2 All ER
^[3] [1984] 1 All ER
^[4] [1980] 2 All ER
^[5] [1999] SBHC 133; HC-CC 206 of 1999 [24 June 1999].
^[6] [1999] SBHC & 37; HC-CC 125 of 1998 [ 3 August 1998].