Myers v Bavadra [1993] FJHC 114; Hbc0183.93l (2 December 1993)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. 183 OF 1993

BETWEEN:

PAUL MYERS
Plaintiff

AND:

APISAI BAVADRA & ANOTHER
Defendant

Mr Young for the Defendant
Mr Maharaj for the Defendant

Date of Hearing: 6th October 1993
Date of delivery of Judgment: 2nd December 1993

INTERLOCUTORY JUDGMENT

ASHTON-LEWIS J. In this matter the plaintiff has applied for an interim injunction pending the determination of the substantive writ action.

The plaintiff seeks the following interim orders that the defendants be restrained from:-

"(i) selling, transferring, disposing, encumbering or charging in any manner whatsoever their fifty ordinary one dollar shares or any part thereof in Gingko Limited to any third parties except the Plaintiff;

(ii) selling, transferring, disposing, assigning, subleasing, encumbering or charging in any manner whatsoever lease of Vunivadra Island NLTB Ref: 4/10/3471 (or part thereof) or any other assets real or personal of Gingko Limited;

(iii) committing or binding Gingko Limited to any contracts undertaking or any other financial commitments whatsoever."

The plaintiff's application came on for hearing before me on the 6^th of October last and I reserved my judgment to be given on notice. After the hearing, the plaintiff sought to adduce further evidence by affidavit. The plaintiff made an application in this regard on the 22^nd of October, and produced an affidavit and annexures sworn on the 20^th of October. It was that affidavit that he sought to have admitted into evidence. The application and affidavit had been served on the defendants' solicitor but service had been refused. On the 25^th of October both counsel for the plaintiff and the defendants appeared before me whereupon counsel for the plaintiff applied to have the further evidence admitted for my consideration. Counsel for the defendants opposed the application and requested time to file an answering affidavit in support thereof. I adjourned the application to admit the further evidence to the 8^th of November. On that day counsel for the defendants advised the Court that the defendants would not file an answering affidavit, but that he would make verbal submissions opposing the plaintiff's application. I then proceeded to hear submissions from counsel for the plaintiff inviting me to admit the further evidence of the plaintiff, and submissions from counsel for the defendants inviting me to refuse the application. After hearing those submissions I advised counsel that I would give my ruling when delivering the interlocutory judgment. I now give that ruling.

Counsel for the plaintiff submitted that the further evidence did not prejudice the defendants, and that if it assisted the court in doing justice then it should be admitted. Counsel submitted that the further evidence was of assistance to the court in this matter, and that I should not take an overly restrictive view in holding the plaintiff to the evidence adduced at the hearing.

On the other hand, counsel for the defendants submitted that I should reject the application of the plaintiff on a number of grounds. It was submitted that the matter had been fully argued at the hearing, and that the plaintiff's further affidavit did not raise any new material but was merely an attempt to "plug holes" in the plaintiff's case that had emerged at the hearing, and to bolster his initial evidence. Counsel submitted that as the matter before the court was an interlocutory application, there should be an end to the proceedings, and unlike the substantive writ action the matter should not continue back and forward between the parties. In short, it was submitted that in the interest of finality to the plaintiff's interlocutory application I should refuse to admit the further evidence of the plaintiff, and proceed to judgment on the application.

The acceptance of further evidence in civil cases after the close of a party's case is a matter for the discretion of the trial judge. In the past, such further evidence has been admitted by the judge either for his own satisfaction, or where the interests of justice required it. (See PHIPSON 14th Ed. Para 12/30).

Later evidence may be admitted in the discretion of the trial judge if no prejudice is caused to the party against whom it is tendered. (See MURRAY v. FIGGE (1974) 4 ALR 612 and BALMS & CO. LTD. & OTHERS v. SHARPE [1910] HCA 26; (1910) 11 CLR 462.)

I am satisfied that the further affidavit evidence sought to be adduced by the plaintiff does not raise any new issues which would take the defendants by surprise. I am also satisfied that the evidence does not prejudice the defendants, and that for my own purposes, and in the interests of justice I should admit that evidence as part of the plaintiff's evidence in the interlocutory application which is currently before me. I therefore rule accordingly.

Thus, before me on the hearing of this application were the following affidavits and annexures:-

1. (a) Affidavit and annexures of Mr Paul Myers dated 3rd June 1993;

(b) Affidavit and annexures of Mr Paul Myers dated 1st October 1993;

(c) Affidavit and annexures of Mr Paul Myers dated 20^th October 1993.

2. For the defendants:-

(a) Affidavit and annexures of Mr Kitione Vuataki dated 5^th August 1993;

(b) Affidavit and annexures of Mr Apisai Bavadra and Mr Viliame Nato dated 24^th September 1993;

(c) Affidavit of Mr George Karan dated 5^th of October 1993.

The facts of the matter relevant to this application are briefly as follows. The defendants are the trustees of the Tokatoka Werecakaca of Viseisei Village in Western Viti Levu. In that capacity they jointly hold 48 fully paid up $1.00 ordinary shares, and 2 unpaid ordinary $1.00 shares in a company known as GINKO LTD. (Ginko). The other 50% share holding in Ginko is held by Mr George Karan of Nadi and his daughter Tilly (the Karans). Ginko is the lessee under an agreement of lease given by the Native Land Trust Board over Vunivadra Island. The island has been identified as having good potential in terms of a tourist resort, and over the past few years the Tokatoka Werecakaca has entered into negotiations with potential investors with regard to the development of the island.

A Mr Kent Anderson became involved with the defendants in this regard and invested funds for the purpose of building bures and developing tourist facilities on the island. Mr Anderson initially held the Karans' 50% shareholding in Ginko. On the evidence before me it appears that Mr Anderson transferred his 50% shareholding in Ginko to the Karans to settle some debts that were owed by him to Mr Karan. Thus, as I have mentioned above, at the time of the hearing before me the owners of the shares in Ginko were the defendants as trustees for and on behalf of the Tokatoka Werecakaca and Mr Karan and his daughter.

On the 26^th of January this year, the defendants sent a letter of offer to the plaintiff offering to sell their 50% shareholding in Ginko. The letter of offer set out that the shareholders of the Tokatoka Werecakaca had unanimously agreed to sell their 50% shareholding in Ginko to the plaintiff on the following conditions:-

(1) that the share payment to the Tokatoka Werecakaca from the plaintiff for the sale of the Ginko shares would be $11,000 per year for the first two years;

(2) that from the third year up until 1998 the payment would be $7,000 per year;

(3) that payment for the shares would be made to the Tokatoka Werecakaca on a monthly in advance basis, and;

(4) first preference for work was to be as stipulated in the Lease Agreement for Vunivadra island.

The letter of offer of the 26^th of January, was entitled "Letter of Offer" and stated that the offer was valid for 90 days from that date. It was signed by the defendants as directors of Ginko and witnessed under the signature of what would appear to be that of Mr Kent Anderson.

The plaintiff did not respond to that letter and nine days later on the 4^th of February, the defendants through the office of their solicitor, Mr Kitione Vuataki, wrote to the plaintiff adding a further condition to the offer made in their letter of the 26^th of January. In that letter they advised the plaintiff that he must have the Karans' shares in Ginko transferred into his name before they would sell their Ginko shares to him. They also advised the plaintiff that the transfer of the Karans' shares to him had to be completed within two weeks of his receipt of that correspondence.

On the 14^th of February, a fortnight later, the plaintiff wrote to Mr Vuataki advising that he had reached agreement with the Karans to purchase their shares. In that correspondence the plaintiff advised the defendants that he did not want to get involved in Ginko "one step at a time" and that the 90 day offer period given to him was so that he could satisfy himself that the acquisition of Vunivadra island was "indeed a good business decision." The plaintiff set out a number of matters of concern to him, and problems with regard to the current operation of the island that he believed were due to the defendants, and would have to be straightened out before he proceeded to purchase any of the shares in Ginko. He made it clear that before he proceeded with the purchase of the shares "he must know the whole the picture." Accordingly, for those reasons the plaintiff advised the defendants that he rejected the two week time frame to have the Karans' shares transferred to him.

The defendants did not respond to that correspondence and by the 26^th of April, on the effluxion of the 90 day period of offer, the plaintiff advised the defendants that he accepted the offer of the 26^th of January. At that time the plaintiff still had not fulfilled the condition that the Karans' shares be transferred to him.

It appears that discussions took place between the plaintiff, his solicitor, the defendants and their solicitor up until mid May when the plaintiff was advised by the defendants' solicitor that the defendants would not transfer their Ginko shares to him, as he had not acquired the Karans' shares by the 26^th of April as per their conditional offer to sell.

On the 7^th of June the plaintiff filed a writ seeking a declaration that there was a binding contract between the parties, and asking for specific performance of the contract or, in the alternative, damages. At the same time the plaintiff made the current interim application.

Should the interim orders as sought by the plaintiff be granted? I believe that in deciding that question, and in the exercise of its discretion in this regard, the court should be guided by, and apply the principles as enunciated in AMERICAN CYANAMID CO. v ETHICON LTD. [1975] UKHL 1; (1975) AC 396.

At this stage, the evidence before the court is incomplete and questions raised at this juncture may only be able to be finally resolved upon a full and proper trial of all the issues at the final hearing, and by a thorough testing of evidence by oral examination and cross examination.

Traditionally, for a plaintiff to obtain the relief sought at this interlocutory stage, he had to be able to establish that there was a case of serious, or sufficient merit for the court to consider, before deciding whether to grant the relief sought by the applicant. In this regard Lord Diplock at p.407 of AMERICAN CYANAMID v. ETHICON LTD. (op. cit) said:-

"The use of such expressions as 'a probability', 'a prima facie case', or 'a strong prima facie case' in the context of the exercise of a discretionary power to grant an interlocutory injunction leads to confusion as to the object sought to be achieved by this form of temporary relief. The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried" (emphasis added)

In SLAYTER WALKER SUPERANNUATION PTY LTD v. GREAT BOULDER GOLD MINES LTD [1979] VicRp 13; (1979) VR 107 at p. 110 Mr Justice Lush said:-

"The weight to be given to the various considerations shown by the authorities to be relevant will vary from case to case. All the authorities say in one way or another that the plaintiff must show that he has a chance of success before he will be granted an interlocutory injunction. The authorities refer to the use of the injunction for the purpose of maintaining the status quo, or establishing or maintaining the status of affairs which is on the balance of convenience appropriate to be maintained until the trial. They refer to avoiding irreparable harm to the plaintiff. There will be situations in which the plaintiff cannot expect to be granted an injunction unless he can show that he can prove positively the existence of his rights and the infringement of them. There will be other situations in which, though the plaintiffs proof of his rights or the infringement them is not strong, an injunction may be granted because to withhold it would do the plaintiff irreparable harm while to grant it would not greatly injure the defendant. The possible variety of situations is unlimited."

These dicta lead me to the conclusion that provided a plaintiff has made out a prima facie case indicating some chance of success in the substantive action, the court should assess, and weigh the relevant strength of each parties' case in order to determine whether the application should succeed. It is at this point that the authorities speak of the court examining the balance of convenience between the parties in an effort to assist the court in deciding what status quo should be maintained, and in whose favour equity should prevail in the exercise of the court's discretion.

I turn now to examine the question of whether the plaintiff has made out on the evidence before me, a prima facie case upon which the court should act to grant the interim relief sought until the further hearing and determination of the issues between the parties.

The plaintiff's evidence alleges that he had incurred approximately four and half thousand dollars worth of expenses as a result of the defendants' letter of offer of the 26^th of January, and had obligated himself in a further amount of three and half thousand dollars. Counsel for the plaintiff submitted that when the plaintiff began to incur those expenses and obligations, that constituted, acceptance of the terms of the letter of offer and that a unilateral contract came into being at that time between the parties, strictly on the terms of the letter of offer of 26^th of January. Counsel submitted that as such, the defendants could not vary the conditions of that contract by their later letter of the 4^th of February, which added the further condition requiring the plaintiff to have the Karans' shares transferred to his name within two weeks, before any further negotiations could take place with regard to the sale of the Ginko shares. Counsel submitted that the expenses and the obligations incurred by the plaintiff after the 26^th of January, particularly the repatriation airfares to Sweden for Mr Kent Anderson, constituted consideration by the plaintiff for the unilateral contract.

In the alternative, counsel submitted that those expenses incurred by the plaintiff was consideration for keeping the offer of the 26^th of January open for 90 days on those terms, and those terms alone, and thus the defendants could not add the further condition of the purchase of the Karans' shares to the initial letter of offer. Under this alternative, counsel for the plaintiff submitted that when the plaintiff accepted the offer on the 26^th of April, he had done so within the 90 day period, and thus a binding contract came into being between the parties.

In relation to the submission that a unilateral contract came into being between the parties immediately after the 26^th of January, and precluded the further condition with regard to the Karans' shares. Acceptance of an offer creates contractual relations. An acceptance is an unequivocal communication to the offeror by the offeree of agreement to both the terms of the offer, and that the offeree commits himself to the contract. If acceptance is by way of a counter-promise a bilateral contract comes into being. If acceptance is by way of performing certain acts which are stipulated in the offer, then a unilateral contract comes into being. In a unilateral contract the offeror usually makes a promise stipulating acceptance on the part of the offeree by the performance by the offeree of an act or acts.

Acceptance of an offer by conduct giving rise to a bilateral contract should not be confused with an acceptance of an offer by conduct giving rise to a unilateral contract. The distinction is important because the terms and nature of the offer will usually determine whether the appropriate response by the conduct of the offeree is a condition precedent to the later formation of a binding contract between the parties, or is a condition subsequent to the performance of an already existing contract between the parties. In the former, the conduct by the offeree is a condition precedent to the formation of a contract which will later come into being between the parties, whereas in the latter, the conduct by the offeree^-is a condition subsequent of an already existing unilateral contract between the parties. In other words, in a unilateral contract the conduct of the offeree is part of the performance of an already existing contract between the parties.

The real distinction between bilateral and unilateral contracts lies not in the nature of the act of acceptance, but in whether there is in fact a contract in existence between the parties before the performance of that act or not. In a bilateral contract there will be no such contract in existence. There will only be an executory, (or future) promise by the offeree, but in a unilateral contract the promise will be executed the moment it is made. In a bilateral contract the offer will only become binding on the offeror when the offeree accepts by giving his executory promise in return. Whereas, in a unilateral contract, performance of the requested acts by the offeree as stipulated by the offeror in his offer constitutes the offeree's acceptance of the offer.

Thus, if the consideration required from the offeree is a promise, the giving of that promise will result in a bilateral contract in which mutual promises are exchanged. If, on the other hand, the requested consideration by the offeror from the offeree, is an act other than a promise, the performance of that act creates a unilateral contract which will bind the offeror.

I am satisfied that the defendants' letter of offer of the 26^th of January was an offer that did not create a unilateral contract between the parties. The conditions set out in the letter did not require any acts to be performed by the plaintiff at that stage. The conditions were matters which the plaintiff was required to give his assent to, prior to the formation of, and in order to bring about, a contract between the plaintiff and the defendants. The conditions were in relation to agreeing to future methods of payment for the purchase of the Ginko shares and giving first preference of employment to the members of the Tokatoka Werecakaca after the plaintiff had accepted the offer and a binding contract had come into being. None of those acts could be performed by the plaintiff until a binding contract of sale had come into being and was in fact being executed. To bring such a contract into being the plaintiff was required to agree to, or promise to accord with those conditions, within 90 days of the 26^th of January. As such, the plaintiff was to give a promise to carry out those conditions before an agreement could come into effect. Once a contract had come into being on his promise to accord with those conditions, the plaintiff would then be required to carry them into effect. Thus, at the stage of the letter of offer the plaintiff could only in effect give a promise for another promise with regard to the future formation of what would be a bilateral contract which would come into being on his communication of the acceptance to the defendants offer on those conditions.

In this regard, I am of the opinion that the letter of the 26^th of January was a conditional offer which the plaintiff had 90 days to accept. Acceptance of those conditions by the plaintiff was required before a contract for the sale of the Ginko shares could arise between the parties.

It is important at this juncture to consider the further correspondence of the defendants to the plaintiff of the 4^th of February. Approximately 10 days after the defendants initial letter of offer on the 26^th of January, and before the plaintiff communicated any acceptance of that offer, the defendants' solicitor wrote to the plaintiff on the 4^th of February. In that correspondence the defendants purported to add a further condition to their initial offer. The defendants advised the plaintiff that he must have the Karans' shares transferred to his name before there could be any further "dealing" or "negotiations" with them over the sale of the Ginko shares. They also advised the plaintiff that the Karans' shares had to be transferred into his name within two weeks of the receipt of that letter. On the 14^th of February, ten days later, the plaintiff wrote back to the defendants' solicitor advising that he had entered into an agreement with the Karans to purchase their shares. From reading the correspondence it is clear that the plaintiff treated the defendants' initial letter of offer of the 26^th of January as only an offer, particularly as he commented that he needed the 90 day period to satisfy himself that the acquisition of Vunivadra Island was a good business decision. The plaintiff raised certain matters of concern to him with regard to the acquisition of the island that he believed was the defendants' responsibility, and which needed to be attended to before he could proceed further with the purchase of the Ginko shares. In that regard he advised the defendants' solicitors on page 2 of his letter, "I would hope that you would agree that it would not be prudent of me to have any shares of Ginko Limited transferred to me until the mess that the present shareholders have created is straightened out. I must know the whole picture before I proceed (underlining mine). In the meantime I do respectfully reject your notice of two weeks to acquire the Karans' shares for the reasons outlined above."

From a perusal of all the affidavit evidence and annexures before me, it is quite clear, and I am satisfied that all parties treated the correspondence entitled "Letter of offer" of the 26^th of January as just that, a letter of offer open for 90 days with acceptance to come to a later date.

What was the effect of the defendant's later letter of the 4^th of February requiring the plaintiff to have the Karans' shares transferred to his name, prior to continuing negotiations and dealings with them with regard to the purchase of the Ginko shares?

When the plaintiff received that correspondence he had not^- accepted the offer of the 26^th of January. That offer was still open and unaccepted. Until acceptance by the plaintiff, and the coming into being of a binding contract between the parties, the defendants were entitled to vary the terms of their initial offer by adding further conditions etc., and it would be open to the plaintiff to either accept or reject the varied offer. I am satisfied that the defendants' letter of the 4^th of February had the effect of merely adding a further condition to the initial offer of the 26^th of January. The plaintiff accepted that further condition, but rejected the two week time frame in which to have the Karans' shares transferred to him. The rejection of the two week period in this regard appears to be based on the plaintiff's stated intention in his correspondence, to use the 90 day period of offer to satisfy himself that the purchase of the Ginko shares, and the acquisition of Vunivadra Island was indeed a sound proposition.

The rejection by the plaintiff of the two week time period to acquire the Karans' shares was not responded to one way or the other by the defendants, and in the circumstances, I am of the opinion that the condition ran with the 90 day period of the letter of offer.

As I am satisfied that the requirement of having the Karans' shares transferred to the plaintiff became part of the initial offer of the 26^th of January, the status of the offer after the addition of that further condition needs to be examined. Did that condition, and the plaintiff's advice on the 14^th of February that he had entered into an agreement with the Karans to purchase their shares, bring about any change in the status of the initial letter of offer, and the relationship between the parties as from the 14^th of February onwards? Essentially was the status between the parties still that of an open offer awaiting acceptance by the plaintiff, or had a unilateral contract or conditional contract come into being? As I have stated earlier, whether a condition is precedent to the formation of a contract, or to the performance of an already existing contract, is determined by investigating whether the parties have, or have not completed the process of reaching agreement.

A conditional promise pre-supposes an already existing contract between the parties, and is a promise where the liability to perform that promise depends upon some thing or event occurring, that is to say, if it is one of the terms of an already existing contract, that the liability of the parties shall only arise on the happening of some future event which may or may not occur, or one of the party's doing some particular act.

Again, as I have mentioned earlier, a conditional promise as part of an already existing contract should be distinguished from a condition precedent to the formation of a contract. Succinctly, in the case of a condition precedent, no contract will come into being until the condition is fulfilled, whereas in the case of the conditional promise, there is an already existing contract, but the obligations of the parties are suspended until the condition is fulfilled.

From the evidence before me I ^,am satisfied that as at the 14^th of February the plaintiff did not intend to create a binding contract with regard to the sale of the Ginko shares when he corresponded with the defendants' solicitor in response to the his letter of the 4^th of February adding the further condition with regard to the Karans' shares. By that date, the plaintiff had not communicated any acceptance to the initial letter of offer of the 26^th of January. The defendants, on the 4^th of February, added the further condition to their still open and unaccepted offer, and made it clear that that condition had to be fulfilled before any further dealing between the parties could take place. On the 14^th of February when the plaintiff wrote back, he indicated that he had accepted that further condition of the defendants by advising that he had entered into an agreement with the Karans for the purchase of their shares, but rejected the two week time limit on the basis that he needed to be satisfied that certain obligations on the part of the defendants had to be attended to before he would conclude, or accept their offer of sale of the Ginko shares.

The defendants' offer remained open for 90 days, and on the last day of the offer, i.e. the 26^th of April, the plaintiff purported to accept that offer. At that date however, he had not been able to have the Karans' shares transferred to him. The defendants took the view that the condition precedent in that regard was unfulfilled and thus their offer lapsed.

I am of the opinion that the defendants were entitled to take the view that they did. The acquisition of the Karans' shares by the plaintiff by the effluxion of the 90 day period of offer had become a condition precedent to the formation of a binding contract between the parties. The plaintiff had not fulfilled that condition precedent by the 26^th of April and thus the offer lapsed. The plaintiff's purported acceptance of the offer of the 26^th of January without having acquired the Karans' shares, was ineffectual, because that offer had after the 4^th of February included such a condition. After the 4^th of February the offer purely in terms of the 26^th of January ceased to exist.

After the 4^th of February an offer incorporating the condition of the acquisition of the Karans' shares had come into being, and I am satisfied that the plaintiff communicated his agreement with that incorporated offer on the 14^th of February when he advised of having entered into the agreement with the Karans to purchase their shares.

In short, the offer purely on the conditions of the 26^th of January, that the plaintiff tried to accept on the 26^th of April did not exist and had not existed since the 14^th of February when he accepted the added condition. The plaintiff had not fulfilled the added condition of having the Karans' shares transferred to him by the effluxion of the 90 day period of offer, thus he was unable to accept the offer. In those circumstances the offer lapsed, and no binding agreement with regard to the sale of the Ginko shares to the plaintiff came into being.

Counsel for the plaintiff further submitted in the alternative that the expenditure of monies on the part of the plaintiff after the 26^th of January, in pursuance of the letter of offer amounted to consideration on the plaintiff's part which formed either a binding unilateral contract between himself and the defendants or, alternatively it amounted to consideration to keep the initial offer of the 26^th of January open on those terms exclusively for 90 days and, that the defendant's letter on the 4^th of February was not effective to add to, or alter the terms of the initial offer. Thus, on the 26^th of April the plaintiff accepted within the 90 day period the defendant's offer and a binding contract came into being.

Counsel for the plaintiff submitted that in all, the plaintiff had incurred expenses of some four and half thousand dollars at the defendants' request and obligated himself in further amounts, bringing his total financial commitment after the initial letter of offer to approximately ten thousand dollars. The repatriation expenses of Kent Anderson were particularly highlighted by counsel for the plaintiff in that regard.

I think that these alternative submissions are again answered by what I have said above. On the evidence before me there is nothing to show any intention in the minds of the parties to create either a unilateral contract between themselves, as at the 26^th of January, or at any time within 90 days from that date. In so far as counsel for the plaintiff's further submission, that the expenses incurred by the plaintiff after the 26^th of January constituted consideration to keep that initial letter of offer open exclusively on those terms for 90 days. This would in effect amount to an option. I can find no evidence to show that the parties had either any intention to create an option or to make such an agreement that the expenses incurred by the plaintiff would lead to the conclusion that it was consideration flowing from the plaintiff for such an agreement.

The conventional way to make an offer open on certain terms for a certain time is to create an option. This is done by way of either a separate contract of option collateral to the main contract, or is incorporated as a part of the substantive contract between the parties. To create such an open offer for a certain time requires agreement or intention between parties in that regard, and separate consideration from the offeree flowing to the offeror to keep his offer open on those terms exclusively for the agreed period of time. In the case at hand, I am satisfied that all the defendants did was to make a bare promise to keep their offer open for a period of 90 days. They did not bind themselves to keep it open exclusively on any set of terms or conditions, and the expenses incurred by the plaintiff was not the price agreed to between the parties to do so. The fact that the plaintiff had legitimate expectations and incurred certain expenditure after the 26^th of January in reliance on the defendants' offer, did not give rise to a binding agreement between them. On the evidence before me there is nothing to show a clear intention between the parties to create such an irrevocable offer, or any consideration flowing from them in pursuance of such an agreement.

I find that this alternative submission of counsel is further lessened when one considers that the plaintiff himself accepted the later addition on the 4^th of February to acquire the Karans' shares by entering into an agreement with them in that regard, and communicating such agreement and information to the defendants in his letter to them of the 14^th of February.

I am of the opinion that the acquisition of the Karans' shares is central to determining the contractual relationship between the parties. The condition with regard to those shares imposed by the defendants on the 4^th of February was fundamental to the latter formation of a binding contract between them. By the 26^th of April the plaintiff still had not had those shares transferred to him. Everything hinged on him having those shares. While I am of the opinion that no unilateral contract ever existed between the plaintiff and the defendants, even if one did come into being after the 26^th of January, the later added condition, which was accepted by the plaintiff as to the acquisition of the Karans' shares by the 26^th of April, was a condition which had to be fulfilled by the plaintiff by the 26^th of April. That condition had not been fulfilled by that date and thus, in those circumstances even if a unilateral contract had existed, a vital condition of that contract remained unperformed as at the 26^th of April and thus the contract lapsed. On the other hand, as a condition precedent to the formation of a bilateral contract between the parties for the purchase of the Ginko shares, the acquisition of the Karans' shares by the plaintiff by the 26^th of April, was a pre-requisite to the formation of such a contract. The plaintiff was unable to fulfil that pre-requisite thus the offer lapsed.

Whether the acquisition of the Karans' shares is viewed as either a condition subsequent to a unilateral contract, or a condition precedent to the formation of a contract, it remained unfulfilled as at the 26^th of April and thus the plaintiff was not in a position to either enforce a contract of sale for the Ginko shares, or accept the offer which had been made by the defendants to sell those shares.

On the evidence before me at this stage I am satisfied that at no time did a binding contract for the purchase of the defendants' Ginko shares ever come into being between the plaintiff and the defendants. What did exist in effect was an offer setting out that a binding contract for the sale of the Ginko shares to the plaintiff would come into being between the parties, if the plaintiff agreed to the conditions set out in the initial letter of offer of the 26^th of January and, had transferred to his name the Karans' shares by the 26^th of April. If the plaintiff achieved that he would then have been in a position to accept the offer of the defendants in accordance with the conditions imposed by them. It would only be at that stage that the plaintiff could accept that offer and a binding contract come into being between the parties. Clearly, the agreement for the sale of the Ginko shares could only arise after the plaintiff had the Karans' shares transferred to him. At the time that the plaintiff entered into the agreement with the Karans to purchase their shares there was no agreement on foot between the plaintiff and the defendants to purchase the Ginko shares, only an offer in that regard, because the plaintiff had not accepted the defendants offer, and simply was not in a position to do so until he had acquired the Karans' shares.

Thus, for the forgoing reasons I am not persuaded on the evidence before me at this stage that the plaintiff has a good arguable case, and that there is a serious question to be tried by the court in this regard.

Be that as it may, I feel that I should make some mention of the question of the balance of convenience between the parties. As a central aspect of an equitable application such as this, is the question of the preservation of the status quo between the parties, the exercise of the court's discretion in such application is greatly aided by a consideration of the balance of convenience with regard to the competing interests of the parties before the court.

The status quo in this case at the time of the application was that the defendants were the owners of 50% of the Ginko shares, and that the plaintiff was in the process of negotiating the purchase of those shares. I am satisfied that no binding agreement between the plaintiff and the defendants for the purchase of those shares had come into being, that and an open conditional offer for 90 days to the plaintiff to purchase those shares had lapsed, unaccepted by the plaintiff as he had been unable to fulfil a vital condition of the offer.

Thus, all that existed between the parties as at the 26^th of April when the offer lapsed was negotiations.

There is evidence before me that the plaintiff incurred expenses in reliance on the defendants' offer, and that there may have been continuing negotiations between the parties after the lapse of the defendants' offer on the 26^th of April. As I have mentioned, the plaintiff did not have the Karans' shares transferred to his name by that date, which I am satisfied was a vital condition precedent to the formation of any agreement with the defendants for the purchase of their Ginko shares. There is evidence before me that the plaintiff had entered into an agreement to purchase the Karans' shares, but there is also before me an affidavit from George Karan alleging fraud on the part of the plaintiff in that regard, and an unwillingness to ever transfer his shares to the plaintiff. The court is not in a position to make any final assessment of that evidence with regard to the Karans' shares at this stage. That would have to be determined upom a full trial of the Writ Action and the viva voce evidence of the respective parties thereto. It may be that the plaintiff would be successful in an action for breach of contract against the Karans. It maybe that the plaintiff could continue to negotiate further with the Karans and the defendants. Those matters at this stage are speculation.

The court in an application of this nature is somewhat hindered in that it can only reach a decision on the basis of the limited evidence available to it on affidavit. It may be that at the time of the trial on oral evidence, further evidence will emerge which would create a very different picture of the events from that which existed at the interlocutory stage.

Be that as it may, the court must make a decision and exercise its discretion on the evidence that is available to it at the time of the application.

What I have before me is evidence that satisfies me that no contract existed, or exists now between the plaintiff and the defendants. The plaintiff has not been able to fulfil a vital condition precedent to the formation of such a contract, and it appears that in the foreseeable future he will be unable to fulfil that condition short of an independent court action against the Karans. It also appears that the relationship between the plaintiff and the defendants has broken down, and that even if he were able to overcome the Karans' unwillingness to transfer their shares to him, the defendants would not be prepared to enter into a contract with the plaintiff in that regard.

I accept that the plaintiff has expended sums of money in reliance on, and expectation of, a successful conclusion of an agreement with the defendants, however, I am satisfied that in all the circumstances of this case the balance of convenience continues to lie with the defendants. They are the directors of Ginko Limited which in turn holds the lease to a valuable asset and they would be in a position to meet any order ultimately made against them for damages should a court so order in the future.

For the reasons outlined in this Judgement I believe that the status quo as existed between the plaintiff and the defendants as at the 26th of April 1993 should be maintained by the court at this stage. As of that date I am satisfied that no binding contract of sale of the Ginko shares existed between the plaintiff and the defendants, but only negotiations in that regard. Under those circumstances I do not believe that the defendants should be restrained as sought by the plaintiff in his application.

Accordingly, I decline to grant the plaintiff the orders sought and dismiss his application with costs to be costs in the cause.

DAVID E. ASHTON-LEWIS
JUDGE

HBC0183.93L