Ray v Montgomery [1995] FJHC 113; Hbc0557d.94s (7 July 1995)

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

ACTION NO. HBC0557 OF 1994

BETWEEN:

JERRY DONALD RAY
PLAINTIFF

AND

HUGH MONTGOMERY & DAVID MONTGOMERY
DEFENDANTS

Mr. Nagin for Plaintiff
Mr. Fa for Defendants

RULING

This is an application by the First and Second Defendants for an Order of Dissolution of Restraining Order and Injunction granted to the Plaintiff on 25th November, 1994 pertaining to the fishing vessel "F.V.Archer"(vessel). This case arises out of an alleged breach of contract by the Defendants, to wit a Bareboat Charter Agreement (Agreement) between the parties executed on May, 1992.

I regret that the delivery of this Ruling has taken rather longer than I would have wished.

A number of Affidavits were filed by both parties which I have thoroughly perused and most of the matters deposed to are really irrelevant for the purpose of this present application as they affect the merits of the case and ought properly to be raised at the trial. Suffice it to briefly state here the relevant part of the Agreement, to this application.

The Plaintiff agreed to bareboat charter the vessel to the Defendants and allow them to use the gear and vessel ("permits") to fish in Hawaii for deep sea fish and lobsters.

An option to purchase the vessel was also offered to the defendants for a price of Three Hundred and Fifty Thousand Dollars ($350,000).

After the vessel was delivered to the Defendants they proceeded to Hawaii to fish. While in Hawaii he became acquainted with one Grahame Southwick and had on several occasions done business with him in Hawaii as he used to sell fish to his Company, Hawaiian International Seafood Inc. Through his business dealings with Mr.Southwick, he was invited to bring his boat down to Fiji and to enter into a partnership with Mr.Southwick, who runs a big Fishing Fleet, to do deep sea fishing in Fiji.

The First Defendant then flew down to Fiji to make final arrangements before bringing his vessel down.

Prior to leaving Hawaii on 26th September, 1994 he obtained the Plaintiff's approval. First Defendant and his wife arrived in Fiji on 10th October, 1994 and found out that Mr.Southwick had not done any arrangement that he had promised to do. The Defendants waited but to no avail. Through frustrations First Defendant obtained a temporary fishing licence with two local partners, from the Fisheries Department. Relations between Defendants and Mr.Southwick became sour and as a result Mr.Southwick acted as agent for the Plaintiff and commenced an action through counsel to obtain a Restraining Order and Injunction. The Restraining Order was granted on 25th November, 1994. It is this Restraining Order which the Defendants wish to persuade this Court to dissolve.

In this Ruling I shall only deal with the parts of the Affidavits filed by both parties which are, in my view, relevant to the Defendant's application for Dissolution of the Restraining Order granted in favour of the Plaintiff, and I am grateful to both Counsels for providing me with authorities, which I found very useful, and also for their forceful arguments on behalf of their respective clients.

Mr. Isireli Fa submitted that under the Agreement the only Court which has competent jurisdiction to hear any dispute under the Agreement is any Federal or State Court in King County, Washington as specifically expressed in Clause 20 of the Agreement which reads:

"20. ENFORCEMENT - In the event any legal action is instituted in connection with this Agreement and should it become necessary to enforce any rights hereunder or arising out of this Agreement, the prevailing party shall be awarded all costs of such action together with a reasonable amount of attorneys' fees paid in connection with such action. The venue of any legal action may be in any Federal or State Court in King County, Washington. (my underlining)

Mr.Fa in support of his argument cited the case of Spiliada Maritime Corporation and Cansulex Ltd (H.L.(E))[1987] at page 474 (B&C). Lord Goff of Chieveley said:

In cases where jurisdiction has been founded as of right, i.e. where in this country the defendant has been served with proceedings within the jurisdiction, the defendant may now apply to the court to exercise its discretion to stay the proceedings on the ground which is usually called "forum non conveniens". That principle has for long been recognised in Scots law; but it has only been recognised comparatively recently in this country. In The Abidin Daver [1984] A.C. 398, 411, Lord Diplock stated that, on this point, English law and Scots law may now be regarded as indistinguishable. It is proper therefore to regard the classic statement of Lord Kinnear in Sim v. Robinow (1892) 19 R. 665 as expressing the principle now applicable in both jurisdictions. He said, at p. 668:

"the plea can never be sustained unless the court is satisfied that there is some other tribunal, having competent jurisdiction, in which the case may be tried more suitably for the interests of all the parties and for the ends of justice."

Mr. Fa continued saying that this court is not the proper forum as both parties and witnesses live in the United States of America and therefore it will be very inconvenient and expensive to bring everyone down to Fiji.

He also referred the Court to a statement which is also reported in the Spiliada case in the speech of Lord Goff at bottom of page 474:

Lord Sumner referred to a phrase used by Lord Cowan in Clements v. Macaulay (1866) 4 Macph. 583, 594, viz. "more convenient and preferable for securing the ends of justice" and said, at p.22:

"one cannot think of convenience apart from the convenience of the pursuer or the defender or the court, and the convenience of all these three, as the cases show, is of little, if any, importance. If you read it as 'more convenient, that is to say, preferable, for securing the ends of justice,' I think the true meaning of the doctrine is arrived at. The object, under the words 'forum non conveniens' is to find that forum which is the more suitable for the ends of justice, and is preferable because pursuit of the litigation in that forum is more likely to secure those ends."

Again at page 476 F to H, Lord Goff continued:

(c) The question being whether there is some other forum which is the appropriate forum for the trial of the action, it is pertinent to ask whether the fact that the plaintiff has, ex hypothesi, founded jurisdiction as of right in accordance with the law of this country, of itself gives the plaintiff an advantage in the sense that the English court will not lightly disturb jurisdiction so established. Such indeed appears to be the law in the United States, where "the court hesitates to disturb the plaintiff's choice of forum and will not do so unless the balance of factors is strongly in favour of the defendant,": see Scoles and Hay, Conflict of Laws (1982), p.366, and cases there cited; and also in Canada, where it has been stated (see Castel, Conflict of Laws (1974), p.282) that "unless the balance is strongly in favour of the defendant, the plaintiff's choice of forum should rarely be disturbed." This is strong language. However, the United States and Canada are both federal states; and, where the choice is between competing jurisdictions within a federal state, it is readily understandable that a strong preference should be given to the forum chosen by the plaintiff upon which jurisdiction has been conferred by the constitution of the country which includes both alternative jurisdictions.

And again at page 481 B and C:

In Societe Generale de Paris v. Dreyfus Brothers [1885] UKLawRpCh 106; (1885) 29 Ch.D. 239, 242-243, Pearson J. said:

"it becomes a very serious question...whether this court ought to put a foreigner, who owes no allegiance here, to the inconvenience and annoyance of being brought to contest his rights in this country, and I for one say, most distinctly, that I think this court ought to be exceedingly careful before it allows a writ to be served out of the jurisdiction."

There is no dispute at all as to the proper forum as agreed to by both parties, and spelt out in Clause 20 of the Agreement i.e. any Federal Court or the State Court in King County, Washington.

Clause 20 of the Agreement has been invoked by the Defendant and has filed a case against the Plaintiff for breach of contract under the Agreement, in the Superior Court of the State of Washington, as evidenced by a copy of summons prepared by Defendants' Attorney in Washington, marked Annexure "A" to Defendant's Affidavit, dated 20th May, 1995 in relation to the seizure of the vessel by the Plaintiff on or about 2nd February, 1993.

Mr. Fa continued with his argument and repeated that this Court has no jurisdiction to hear this matter, as its jurisdiction has been wrongly invoked and has further wrongly exercised its discretion to suppress Clause 20 of the Agreement. The only means by which this Court could claim jurisdiction, is by invoking its Admiralty jurisdiction, which has not been invoked. The action should be on the Archer (refer to The Ship M.V. Voselia, Admiralty Action No.0006 of 1994). The injunction is out of order as the method chosen by the Plaintiff is wrong.

In considering the authorities cited thus far and the submission made by Mr.Fa, I agree that this Court has no jurisdiction over this matter and therefore it is not the proper forum to entertain any action arising out of the Agreement, except through its Admiralty jurisdiction.

I would have dissolved the Restraining Order and Injunction on this ground of lack of jurisdiction alone, but Mr.Nagin in reply referred to Halsbury's Law of England Volume 37 paragraph 214 at page 158 with heading -

"Submission to the jurisdiction".

"The acknowledgment of service by the defendant is prima facie to be treated as a submission by him to the jurisdiction of the court in the proceedings although it will not have this effect if the acknowledgment is withdrawn with the leave of the court or the defendant applies in due time and form disputing the court's jurisdiction.

Moreover, if the defendant's application to dispute the jurisdiction of the court on any ground is dismissed or no order is made on it, the defendant has the opportunity of lodging a further acknowledgment of service and, on giving notice of intention to defend in the further acknowledgment, to defend the action on its merits.

Further, if the defendant takes any fresh step in the action after becoming aware of his entitlement to dispute the jurisdiction of the court or of any irregularity in the writ or service of the writ or other objectionable irregularity, this fresh step may amount to a submission to the jurisdiction or a waiver of the irregularity. For this purpose a fresh step is any step taken with a view to defending the case on its merits or to obtain an advantage in the action. It is, however, expressly provided that an application to dispute the jurisdiction of the court on any ground will not be treated as a submission to the court's jurisdiction."

Since the Defendants have acknowledged Service of the Writ of Summons through their then Solicitor Mr. Joeli Baledrokadroka on 2nd December, 1994, the Defendants have therefore submitted to the jurisdiction of this court.

I must reluctantly agree with Mr. Nagin's contention but I still believe that the most convenient and proper forum for this matter would be one which is spelt out in Clause 20 of the Agreement or at the very least, Plaintiff should have invoked the Admiralty jurisdiction of this court to empower this court over this matter. But technically in my view this court is now vested with jurisdiction over this matter through the Acknowledgment of Service of the Writ of Summons by the Defendants.

It is unfortunate for the Defendants that they did not apply in due time and dispute this court's jurisdiction. Although they have filed Defence and Counter Claim, their dispute of the jurisdiction of the court was only raised for the first time at the hearing of this application for Dissolution of Restraining Order and Injunction.

I therefore find that this court has jurisdiction to deal with this matter as Defendants have submitted to its jurisdiction.

I shall now deal with the second and final relevant issue in so far as Defendants application is concerned, as I have mentioned above that most of the matters raised in the affidavits filed by both parties are matters affecting the merit which ought to be raised at the trial.

It is not disputed that the purchase price of the vessel agreed to by the parties were Three Hundred and Fifty Thousand Dollars ($350,000), and it is also not disputed that the Defendants owe Plaintiff Seventy Nine Thousand Dollars ($79,000), the balance of the purchase price of the vessel.

Mr. Fa submitted that since the balance of the purchase price of Seventy Nine Thousand Dollars ($79,000) can be paid by the Defendants they should be allowed to do so, and the Restraining Order and Injunction dissolved.

The Court has the discretion depending on the circumstances of the case whether the interim injunction should remain with or without qualification or should the Plaintiff be left to its remedy in damages.

The principles have been clearly laid down by the House of Lords in American Cyanamid Co v. Ethicon Ltd [1975] UKHL 1; (1975) A.C 396. In that case the Court decided that the matter of this nature are determined on the balance of convenience and if damages are an adequate remedy sought in the Writ the interim injunction shall not be sustained.

The summing up of the principles stated in the American Cyanamid (supra) were considered by the Court of Appeal in Fellows & Son v. Fisher (1976) Q.B 122 and has been summarised by Brown, J. as follows:-

Lord Diplock then laid down a series of principles on which the discretion should be exercised:

" (1) As to that (i.e. the balance of convenience) the governing principle is that the Court should first consider whether if the Plaintiff succeeds at the trial, he would be adequately compensated by damages for any loss caused by the refusal to grant an interlocutory injunction. If damages-------would be adequate remedy and the Defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the Plaintiff's claim appeared to be at that stage. (my underlining)

(2) If, on the other hand damages would not be an adequate remedy, the Court should then consider whether, if the injunction were granted, the Defendant would be adequately compensated under the Plaintiff's undertaking as to damages."

If damages in the measure recoverable under such an undertaking would be an adequate remedy and the Plaintiff would be in a financial position to pay them, there would be no reason on this ground to refuse an interlocutory injunction.

I am satisfied that in this case damages would be an adequate remedy and the Defendants would be in a financial position to pay them. I will therefore order that the Restraining Order and Injunction I made on 25th November, 1994 in favour of the Plaintiff be dissolved forthwith.

I make no order as to cost.

S W Kepa
JUDGE

7th July, 1995

HBC0557D.94S