MINSON (FIJI) LIMITED
Plaintiff
AND:
1. FONG SUN DEVELOPMENTS LTD.
2. CHUNG FONG SUN
3. ADISH NAIDU 4. C. & J. TRADING COMPANY
Defendants
Mr. Q.B. Bale for Plaintiff
Mr. H. Nagin for Dants
JUDGMENT
p class=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> This case arises out of a building contract executed between the plaintiffany as the building contracntractor and the 1st defendant
company the building owner or employer.
The contract was executed by the paron 10th August 1995 and provided for the constructiouction of a new five level office building on Ratu Mara Road at Samabula. It provided inter alia for a completion date, (Clause 21); interim payment certificates (Clause 30); and for the deduction of fixed sums for liquidated damages in the event of late completion (Clause 22).
On the 2nd of April 1996 owing to differences that had arisen between the parties as to an Interim Payment Certificate No.8 the building contractor determined the contract pursuant to Clause 26(1)(a) and issued proceedings by way of a Writ of Summons. On 3rd April the defendants acknowledged service of the plaintiff's Writ and indicated their intention to contest the proceedings.
By ex-parte motion dated 17th April 1996plaintiff sought various injunctive orders against the defe defendants which were granted by the Court on the 19th April 1996. The orders sought to preserve the 'status quo' between the parties until further order.
On 30th April 1996 the defendants moved to set aside the ex-parte orders and for a stay of the plaintiff's action pending the referral and determination of the parties dispute by way of arbitration. On 10th May 1996 the defendants with a view to completing the building project sought various orders including an order that the plaintiff handover
to the 1st defendant all the keys to the defendant's building.
On 14th May 1996 the plaintiff sought leave to issue 'contempt proceedings' against the defendants for allegedly working on the building in contravention of the injunctive orders earlier granted against the
defendants.
On 16th May 1996 all pending interlocutory applications were heard in Chambers. These were (in order of date):
(1) An inter-partes application by the defendants to dissolve the ex-parte orders and for a stay of proceedings pending arbitration;
(2) An inter partes application by the defendants for injunctive orders against the plaintiff dated 20th May; and
(3) The plaintiffs application for leave to issue 'contempt proceedings'.
p class=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> On that occasion the Court disposed of the applications in a 'consener' as follows - ap - applications (1) & (3) above were adjourned on 2 days notice and application (2) was granted on the defendants paying into Court the disputed amount of $115,500. This was duly done on the 24th May 1996.
The day before the money was paid in, the plaintiff company issued an inter partes motion seeking an order that the sum of $115,500 be paid directly to it together with the costs incurred by the plaintiff company's Australian principal in coming to attend a 'Without Prejudice' meeting which failed to eventuate owing to the 2nd defendant's non-appearance.
On 14th June 1996 after several unsuccessful attempts to negotiate a settlement, there hen before the Court three hree (3) applications for determination (in order of date) namely:
(1an> An application by the defendafendants seeking a dissolution of that part of the injunctive relief granted ex-parte which effectively prevented the 1st defendant company from leasing out the premises and for a stay of proceedings pending arbitration;
(2) An application by the plaintiff tiff for leave to issue 'contempt proceedings'; and
(3) A further application bion by the plaintiff for 'payment-out' of the monies paid into Court.
Application (2) was notued by counsel for the plaintiff company at the hearing and need not concern this Court anyt any further. Applications (1) & (3) however, are vigorously pursued and opposed and were the subject matter of comprehensive written submissions provided by both Counsels
and which I have found of some assistance.
Turning then to application (1) in which the defendants seek the lution of the injunction reon restraining them from leasing out the premises and for a stay order pending arbitration proceedings.
As to the dissolution of the injunction, counsel for the defendants submits that as the plaintiff company has determined the contract,
it no longer has a right to possession of the defendant's building site or building and no legal interest or 'cause of action' to support the continuation of the injunction. What's more the 'balance of convenience' strongly favours the defendants being permitted to lease the premises, but and in any event damages would be an adequate remedy in
the event the plaintiff's claim should succeed.
ass=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> Counsel for taintiff on then the other hand and equally forcefully, emphthe 'equitable'< nature of injunctive relief and submits that any dissolution of the injunction would tip the seriously against the interests of the plaintiff company and upset the 'status quo' insofar as the defendant would be at liberty to make money out of the building, the cost of constructing which, the plaintiff claims
has not been fully paid up.
Bearing in mind the function of the Court at this juncture, I have carefully considered the num affidavits filed by the pahe parties,
their respective pleadings, and counsels written submissions, and I am firmly of the view that there exists in this case, serious
legal and factual issues that need to be tried between the parties and arising out of and under the building contract.
In particular, the meaning and effect of Clause 22 of the building contract and its relationship (if any) to Clause 30; whether or not there had been full and proper compliance with the provisions of Clause 23 as to the plaintiff's requested extensions of time; and what effect (if any) it had on the 'Completion Date' and the right of the defendants under Clause 22; and the role of the third defendant in the implementation of the contract vis-à-vis the parties and in terms of the above-mentioned Clauses.
As for damages, I am satisfied that the submissions on this aspect are so evenly and finely balanoth as to hardship, fairnesirness
and adequacy that no firm conclusion may be arrived at on that basis. Finally before examining the question of the 'balance of convenience' in the case, I turn to defence counsel's submissions on the second limb of application (1) above i.e. the stay.
In this regard counsel refers to the provisions of Clause 33 of the ing contract and submits thts that it is clearly applicable to the present circumstances. I note however that it is not a
'Scott v Avery' Clause which requires that a dispute or difference be referred to arbitration before any Court action may be brought. Furthermore
Section 5 of the Arbitration Act (Cap.38) recognises that the Court has a wide and unfettered discretion whether or not to stay any action pleading arbitration.
ass=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> Plaintiff's counsel for his part, points to thonditional nature of the defendant's 'Acknowledgementement of Service' and the legalistic nature of the issues involved in the case, including the interpretation of contractual provisions; ascertaining
the rights and duties of the parties thereunder; Counsel also asked the Court to consider the additional cost and expense to the
parties of attending an arbitration proceeding which Counsel claims is likely to prove futile.
ass=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> On this second limb, bearing in mind the nature of the reliefs sought by the piff company in its claim whim which includes injunctions,
and the stage to which the proceedings and pleadings have already been advanced by the parties, I am satisfied that this Court should
exercise its discretion by refusing the defendant's application for a stay.
Finally, I turn to the plaintiff's application for 'payment-out' of the sum of $115,500. In this regard counsel for the plaintiff submits that the sum ordered to be paid into Court represents the amount 'wrongfully' deducted by the defendants pursuant to Clause 22 from a certified Payment Certificate and therefore rightfully belongs to and ought to be paid out to the plaintiff company.
ass=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> Defence counsel submits however that the monies were paid into Court as a pre-tion to the defendants bein being allowed to enter upon
and complete the construction of its building and was meant to be held pending the final determination of its disputed right to deduct
the same in terms of Clause 22 of the contract and therefore, failing such determination, ought not to be paid out to the plaintiff company.
With all due regard to defence counsel's submissionnnot agree. Order 22 r.8(1) of the High Cogh Court Rules states quite plainly (subject to an inapplicable variation):
"... money paid into Court under an order of the Court ... shall not be paid out except in pursuance of an order of the Court."
Needless to say this was not a voluntary 'payment-in' by a defendant uOrder 22 r.1 in satisfaction of a plaintiff's claim or 'cause or action', rather, the 'payment-in' was ordered by the Court in the exercise of its unfettered discretion to grant the defendant's equitable relief sought albeit in an interlocutory motion, but nevertheless final in its effect in that the defendants were permitted thereby to complete the construction
of the building.
In my view the 'payment-in' was a condition of the injunction sought but cannot tore be said to be itself tilf tied down to a resolution of any particular dispute
between the parties in the substantive action.
More ere no evidence or calculation has been provided in the defendant's affidavits to support sort such a figure being 'liquidated damages' in terms of Clause 22.
In all the circumstances I am satisfied that the 'balance of justice'and by a further order that the sum of $115,500 paid into Court be paid out to the plaintiff company forthwith.
In csion the defendants application (1) above is granted as to the dissolution of the injunctionction preventing them from leasing
the building, but refused as to a stay of proceedings pending arbitration and the plaintiffs application (3) above is granted.
D.V. Fatiaki
JUDGE
At Suva,
23rd August, 1996.
Hbc0139j.96s
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