Wing Ip Chin v Nands Consultancy and Management Services Ltd [1993] FJHC 7; HBC0244j.92s (22 January 1993)

IN THE HIGH COURT OF FIJI
(AT SUVA)
CIVIL JURISDICTION

ACTION NO. 244 OF 1992

BETWEEN:

WING IP CHIN
of 67 Millet Street,
Vatuwaqa, Suva, Businesswoman
Plaintiff

AND

NANDS CONSULTANCY & MANAGEMENT SERVICES LIMITED
a limited liability company having its registered office
at 67 Millet Street, Vatuwaqa, Suva
1st Defendant

SHARDA NAND
of 67 Millet Street,
Vatuwaqa, Suva, Businessman
2nd Defendant

ANZ BANK LIMITED
a limited liability company of Suva
3rd Defendant

Mr. I. Fa for the Plaintiff
Mr. V. Kapadia for the First and Second Defendants
No Appearance for the Third Defendant

Date of Hearing: 22nd January 1993
Date of Interlocutory Judgment: 22nd January 1993

INTERLOCUTORY JUDGMENT

The Plaintiff is a businesswoman who came to Fiji on the 22nd August, 1991 from Hong Kong looking for business opportunities. She then met two Chinese gentlemen namely Mr. Hsi and Mr. Nau Shuan who apparently told the Plaintiff they operated a business known as Ten Tsi Enterprises whose main business was the export of marine products from Fiji.

The First Defendant operates a business of Management Marketing and Financial Consultancy and has its registered office at 67 Millet Street, Vatuwaqa.

The Second Defendant is the principal officer of the First Defendant and conducts all its business.

The Third Defendant carries on banking business in Fiji and has its registered office in Suva.

On the 15th of May 1992 Mr. Justice Ashton-Lewis granted a Mareva Injunction on the ex-parte application by the Plaintiff restraining the Third Defendant either by itself or its servants or agents from releasing to the First and Second Defendants all the moneys held by them in Account No. 30-376391-00 at the ANZ Bank, Dominion House Branch, Suva or any other account with the Third Defendant until the final determination of this action. The Judge also granted an Injunction restraining the Third Defendant from transferring any moneys held by it for the First and Second Defendants out of the jurisdiction of this Court until the final determination of this action. In support of her application for the Injunction the Plaintiff gave the usual undertaking in damages.

The matter then proceeded through various adjournments until on the 2nd of October, 1992 the First and Second Defendants swore and filed an Affidavit in Reply to the first affidavit in support of the Injunction by the Plaintiff which had been sworn and filed on the 15th of May 1992.

The First and Second Defendants also delivered a brief Statement of Defence and on the 14th of January 1993 the Plaintiff swore a further Affidavit in Reply to that of the Defendants.

Presently before me is an application by the First and Second Defendants to dissolve the Injunction granted by Ashton-Lewis J.

So far the Plaintiff has not delivered a Statement of Claim although what is actually an Indorsement of Claim wrongly termed a Statement of Claim is annexed to the Writ issued herein on the 15th of May 1992.

This Indorsement simply states that the Plaintiff claims from the First and Second Defendants the sum of $125,000.00 being the amount paid to those Defendants by the Plaintiff through a Westpac Bank cheque on the 12th of November 1991 for the supply of marine products which the First and Second Defendants have refused to supply.

The affidavit in support of the application for the Mareva Injunction sworn by the Plaintiff states that following her meeting with Mr. Hsi and Mr. Nau Shuan, on the 11th of November 1991 the Second Defendant on behalf of the First Defendant offered to Ten Tsi Enterprises the sale of marine products as described in a Proforma Invoice addressed to the Plaintiff and Messrs Hsi and Nan Shuan "trading as Ten Tsi Enterprises, 67 Millet Street, Vatuwaqa, Suva". This invoice sets out the price for various quantities of marine products or Beche-De-Mer the total value of which is stated to be F$149,000.00. The terms of proposed sale are also set out and it is convenient to state them here:

1. All 'A' grade product to be delivered at the premises of buyer at 67 Millet Street, Suva, 15 DAYS AFTER PAYMENT OF 80% DEPOSIT.

2. Any product not 'A' grade may be rejected by buyer.

3. 80% deposit and supplier will send his team to buy in Lau Group.

4. 20% final payment on receipt of products of 'A' grade.

5. Any quantity difference to be adjusted in price totals.

6. Any surplus payments or deposit will be refunded.

7. Any short payment will be recovered.

8. Supplier will assist with Licence to Export or provide own Licence for Export.

9. Acceptance of products or buyer will conclude the sale.

10. CALCULATION: 80% OF $149,000.00 = $119,200.00.

The invoice appears to be signed by the same person who signed and swore the Defendant's affidavit herein, whom I presume to be Mr. Shardha Nand.

The Plaintiff then deposes that on the 12th of November 1991 she paid Mr. Shardha Nand $125,000.00 on behalf of Ten Tsi Enterprises to supply the marine products described in the invoice and was given a receipt by the First Defendant for this amount.

The receipt is dated 12th of November 1991 and states that Nands Consultancy and Management Services received from Ten Tsi Enterprises the sum of $125,000.00 as "deposit 80% for Beche-De-Mer to be supplied as per Proforma Invoice 11 Nov. 1991". The amount and the number of the cheque are then stated on the receipt.

The Plaintiff contends that since the Second Defendant received the $125,000.00 he has refused to supply the marine products mentioned in the invoice and has refused to repay the Plaintiff's money. She then says that at the time she gave the Second Defendant the money, the Second Defendant was handling all her affairs pertaining to the registration of her business, obtaining F.T.I.B. approval of her project and obtaining work permits for her. She says that she trusted the Second Defendant as he was a Justice of the Peace. She then states, and this is not denied by the Defendants, that on the 12th of November 1991 the Second Defendant paid the Plaintiff a cheque for $125,000.00 into his bank account in the ANZ Bank, Dominion House Branch, Suva. She then states that on the 19th of November 1991 there was a balance of $96,033.25 in that account and that on the 15th of May 1992 this had been reduced to approximately $90,000.00.

The Defendants deny these latter allegations. They say that the Plaintiff owes the Second Defendant the sum of $31,019.00 for consultancy services rendered to the Plaintiff between 7th November 1991 and 23rd April 1992 which are the subject of Civil Action No. 213 of 1992 in this Court.

The Defendant states that as a result of his consultancy services the Plaintiff has obtained approval for a company T. D. Marine Products Limited to operate in Fiji and has been granted a three year work permit to reside and work in Fiji.

Finally the Plaintiff states in her first affidavit that she was very worried that she might lose all her money and thus be unable to start any business in Fiji.

It was on the strength of the allegations in the Plaintiff's first affidavit that my brother Ashton-Lewis granted the Interim Mareva Injunction.

Now before the Court there is not only the affidavit in reply on behalf of the Defendants but also a further affidavit in reply sworn and filed by the Plaintiff.

The Defendants deny that any offer was made to Ten Tsi Enterprises and state that the Proforma Invoice was issued only for consideration by the Plaintiff and that the sum of $125,000.00 was not paid by the Plaintiff but Ten Tsi Enterprises. They further allege that the Plaintiff has not made full disclosure to this Court of the facts of the case, particularly that the Second Defendant had already issued proceedings against the Plaintiff on the 24th of April 1992 claiming the aforesaid sum of $31,019.00. The Second Defendant says that he has substantial assets in Fiji and has no intention of leaving Fiji or moving his assets from Fiji. He also says that he has been appointed a Senator by the President of the Republic of Fiji. He states that the Plaintiff has not shown any grounds why the Mareva Injunction should be granted or, as now, continued.

In her second affidavit the Plaintiff among other things exhibits a copy of an advertisement in the Fiji Times news paper in an issue of some date unspecified but before she commenced her application for an Injunction. An advertiser, who I have no doubt is the First Defendant because the telephone and fax numbers stated in the advertisement are those appearing on the Pro Forma Invoice, advertised 130 acres of freehold land at Vanua Levu with vacant possession for an asking price of $43,000.00 with terms negotiable, and an aerated water factory, with a possible income of $100,000.00 per annum allegedly to be sold at half price for $45,000.00 because the owner was said to be migrating and an executive residence offered for rental at a cost of $975.00 per month.

The Plaintiff alleges that these three advertisements are for the sale of properties owned by the Second Defendant and claims by implication that the Second Defendant is attempting to remove assets from the jurisdiction. She therefore prays that the Mareva Injunction be continued until further order.

I now deal with some of these allegations. As to the claim by the Defendants that the $125,000.00 was not paid by the Plaintiff but by Ten Tsi Enterprises I consider that this can be rejected immediately. The Defendants' invoice is addressed to the Plaintiff and Messrs Hsi and Nau Shuan trading as Ten Tsi Enterprises. This appears to be an admission by the Defendants that the Plaintiff was associated in a business connection with the firm owned as Ten Tsi Enterprises which the Defendants appear to recognise by noting the cheque drawn by the Plaintiff as being from Ten Tsi Enterprises.

As to the Defendants' claim that the Plaintiff has failed to disclose that the Second Defendant had already begun proceedings in this Court against the Plaintiff for a sum of $31,019.00 and that this indicates lack of good faith sufficient to warrant the injunction being dissolved, I do not agree with this. In my view the two claims are separate although I consider that since the parties are the same both in Action No. 213 and the present action, the actions should be consolidated but that her failure to disclose the other proceedings alone should not debar the Plaintiff from retaining her present Injunction.

As to the statement by the Second Defendant that he has been appointed a Senator by the President of the Republic of Fiji, thus apparently suggesting that he is a person unlikely to be guilty of any fraudulent practice against the Plaintiff, I also reject this suggestion. In the eyes of the law all persons are equal and regrettably history is full of instances where persons of apparent high standing in the community have been proved to be otherwise. The fact that the Second Defendant has been appointed a Senator is undoubtedly a recognition by the President of this country that he is a person of some public standing in the community but, of itself, that is no guarantee that he would not attempt to defraud the Plaintiff or to dispose of any assets in Fiji with a view to depriving the Plaintiff of a judgment.

I think however that there are stronger grounds on which I may find for the Defendants in the present application. In my view the advertisements exhibited to the Plaintiff's second affidavit do not provide any proof that the Defendants are endeavouring to dispose of assets with a view to thwarting the Plaintiff in the prosecution of this action. There is no evidence that the properties are owned by the Second Defendant who, in my view, as a consultant and management services businessman, may simply have advertised the properties mentioned for other clients of the Defendants. In Third Chandris Corporation v. Unimarine S.A. (1979) Q.B. 645; (1979) 2 All E.R., Mustill J. and the Court of Appeal suggested the following guidelines for Plaintiffs seeking Mareva Injunctions:

1. The plaintiff should make full and frank disclosure of all matters in his knowledge which are material for the judge to know.

2. The plaintiff should give particulars of his claims against the defendant, stating the grounds of his claims and the amount thereof and fairly stating the points made against it by the defendant.

3. The plaintiff should give some grounds for thinking that the defendant has assets here.

4. The plaintiff should give some grounds for believing that there is a risk of the assets being removed before the judgment or award is satisfied.

5. The plaintiff must give an undertaking in damages in case he fails in his claim or the injunction turns out to be unjustified. In a suitable case this should be supported by a bond or security.

As it is stated in the 1988 Supreme Court Practice on page 480 these guidelines now require slight modification. It is not now necessary to show that the assets may be removed from the jurisdiction; any dealings with them that may defeat the ends of justice will suffice for a Court to grant a Mareva Injunction.

The evidence presently before me satisfies me that the Plaintiff has met guidelines 1, 2, 3 and 5 but as to guideline number 4 I note the remarks of Kerr L.J. in Z Ltd. v. A and Others (1982) 1 All E.R. 556 at p.571. There his Lordship warned against abusing the jurisdiction. He named two types of situations as an abuse of it. The second which he said was much rarer does not concern me here. This is where Mareva is used as a means of enabling a person to make payment under contract to someone in circumstances where he regards the demand for the payment as unjustifiable; and where he obtains a Mareva Injunction ex-parte in advance of the payment, which then has the effect of 'freezing' the sum paid over. The first, however, is I think relevant here. Kerr L.J. described it as where a Mareva Injunction is applied for and granted in circumstances in which there may be no real danger of the Defendant dissipating his assets to make himself "judgment proof". The evidence before me fails to satisfy me that there is either a risk, which has to be a real risk, or a real danger of the Defendants removing their assets before any judgment which the Plaintiff may obtain is satisfied. A Mareva Injunction must never be used as a means of stifling ordinary business enterprise. This is the effect of the remarks of Jayaratne J. in Hometown Motor Company Ltd. v. Samuel Shiu Narayan, Civil Action No. 418 of 1990 in a judgment delivered on the 11th of January 1990. At pp. 5-6 of the report His Lordship quoted with approval the remarks of Lawton L.J. in C.B.S. United Kingdom v. Lambert (1983) Ch.37 at 43F:

"Even if the plaintiff has good reason for thinking that a defendant intends to dispose of assets as to deprive him of his anticipated judgment, the court must always remember that rogues have to live and that all orders, particularly interlocutory ones, should as far as possible to do justice to all parties."

And at p.6 His Lordship said that the Mareva Injunction cannot be invoked simply for the purpose of providing plaintiffs with security for claims, even where these appear likely to succeed and even where there is no reason to suppose that an order for injunction, or the provision of substitute security by the defendant would cause any real hardship to the defendants.

The present material does not persuade me that there is any risk of the Defendants removing assets from the jurisdiction and thus depriving the Plaintiff of any fruits of any judgment he may obtain. I therefore order that the Mareva Injunction granted by Ashton-Lewis J. on the 15th of May 1992 against the First and Second Defendants be dissolved.

As the parties agreed that a speedy trial is desirable I make the following consequential orders:

1. The Plaintiff to deliver a full Statement of Claim by 29th January 1993.

2. The Defendants to deliver Defence by 5th February 1993.

3. The Plaintiff to deliver any Reply by 12th February 1993.

4. Action Nos. 213 and 244 of 1992 to be consolidated.

5. The Plaintiff and the First and Second Defendants to file and serve an Affidavit of Documents by 29th January 1993.

6. On completion of discovery and pleadings both actions to be referred into the Chief Registrar's list for an early date of hearing to be fixed before myself.

7. Costs to be in the cause.

JOHN E. BYRNE
J U D G E

HBC0244J.92S