Foote v Rolls [1982] CKHC 3; HC MISC 6.1982 (15 April 1982)

IN THE HIGH COURT OF THE COOK ISLANDS
HELD AT RAROTONGA
CIVIL DIVISION

MISC. 6/l982

BETWEEN

ROBERT TAYLOR FOOTE
of Rarotonga, Retired
Plaintiff

AND

JOAN ELIZABETH ROLLS
of Rarotonga, Company Director
First Defendant

AND

HIBISCUS HOUSE LIMITED
a duly incorporated company having its registered office at Rarotonga
Second Defendant

Counsel: Mr J. McFadzien for Plaintiff
Mr T. Arnold for the Defendants.

Date of Hearing: 15^th April 1982 (Court by Telephone)

DECISION OF DILLON J.

This is an application by a Mr Foote for whom Mr McFadzien acts against Mrs Rolls and Hibiscus House Limited for whom Mr Arnold appears but not in relation to the interim injunction now applied for by the plaintiff. This is a dispute between a Mr Foote and Mrs Rolls concerning a restaurant known as Hibiscus House; it refers to an amount of some $30,000 owed by either the Rolls or their Company Hibiscus House Limited to Mr. Foote who according to his affidavit had a substantial interest in the management and control of this company as part of an arrangement to secure the advances which he had made to it. One of the conditions referred to in Mr Foote's affidavit is that no new arrangement (which it is claimed would include leases and subleases) can be entered into by the company without Mr. Foote's approval or knowledge. The company has entered into a sublease on the 22 March granting a 2 by 2 sublease to the proprietors of the Jade Garden Restaurant Mr. and Mrs. Hosking. It is confirmed that Mr Foote cannot object or oppose that application because no Leases Approval Committee approval is required for a short term lease. However, there is an application coming before the Leases Approval Committee tomorrow covering a further extension for a term of four years. This is the subject of a separate Deed between Hibiscus House and the Hoskings. That application is made by the Hoskings and to which the Rolls or Hibiscus House Limited are not parties other than signatories to the Deed. Mr and Mrs Rolls are in Hawaii and have not had the opportunity to answer the affidavit filed by Mr Foote, I understand, this morning. This injunction is part of the proceedings between Mr Foote and Mrs Rolls and Hibiscus House; it is against them either as first or second defendant; however, they are not parties to the Leases Approval Committee sitting tomorrow.

A more important consideration has been raised by Mr Arnold namely that the arrangement between Mr Foote and Mrs Rolls is illegal as contravening the Development Investment Act which requires approval in three circumstances of any investment above 33%. Mr Foote's affidavit clearly indicates his claim to be entitled to a 50% shareholding.

Mr. McFadzien referred to the various conditions of the loan that Mr Foote made to the Rolls, e.g. Mr Foote was to get a 50% shareholding in the new company. This clearly evidences a scheme to side-step the Development Investment Regulations. This Court cannot in any circumstances be the instrument to assist one of the parties, irrespective of which one is involved, in an illegal arrangement. Under those conditions no party can request the Court's assistance in the manner in which this application is now made. For these reasons it is quite clear that the application for injunction must be refused. The Court will be sitting in two days time and any further application may then be made either in an interim form or for the parties to fix a date for hearing. The question of costs is reserved and the Court is directed to ascertain the cost of the toll call to hear this application.

DILLON J.