Jones v Marlin Cruise Lines Ltd [1997] FJHC 15; Hbc0324d.96s (30 January 1997)

Fiji Islands - Jones v Marlin Cruise Lines Ltd - Pacific Law Materials

I HIGH COURT OF FIJI

(AT SUVA)

CIVIL ACTION NO. HBC0324 OF 1996S

BETWEEN:

PETER ERNEST JONES

and

JADE PIVAC-JONES

Plaintiffs

ANpan>

MARLIN CRUISE LINES LIMITED

1st Defendant

AND:

JOHN LISTER NICHOLS

2nd Defendant

D. Sharma fo Plaintiffs

R.K. Naidu for the Defendants

DECISION

p class=MsoN=MsoNormal style="margin-top: 1; margin-bottom: 1"> On 4 July 1996 the Plaintiffs commenced proceedings by way of Originating ns against the Defendants snts seeking a number of reliefs including payment of arrears of salaries and repayment of advances. They also sought an injunction restraining the Defendants from selling the assets of the 1st Defendant.

Somewhat mysteriously two substlly similar affidavits were filed in support and on the same day a Motion seeking an interinterim injunction in the same terms as that sought in the Originating Summons was also filed. An affidavit in opposition was filed by the 2nd Defendant on 15 November.

The Plaintiffs and the 2nd Defendant had together developed a holiday resort known as the Natadola Beach Resort. The history of the various dealings between the parties is sufficiently set out in the affidavits and need not be now repeated. Suffice it to say that the Plaintiffs who together manage and operate the resort are minority shareholders in the 1st Defendant which owns the resort while the 2nd Defendant is the majority shareholder.

Unfortunately the resort has not been a financial success and according to thisputed evidence of the 2nde 2nd Defendant is now insolvent, its estimated indebtedness exceeding its assets by approximately $240,000.00. Both the 1st Plaintiff and the 2nd Defendant are guarantors of the very substantial sum owed to the ANZ Bank which is now pressing for repayment. In order to limit losses the 2nd Defendant wishes to sell the resort but the Plaintiffs, who have invested much time and effort in the resort and who have a strong emotional attachment to it wish to purchase the 2nd Defendant's holding in it for themselves. Unfortunately, they are not in a position presently to buy out the 2nd Defendant and hence the present application.

As made clear by Mr. Sharma the Plaintiffs are looking for a twelve months breathing space to raise the necessary capital but if unsuccessful at the end of this period they would consent to the resort being sold on the open market.

While acknowledgiat the Plaintiffs as minority shareholders are subject to decisions of the majority Mr. Sha. Sharma pointed to Exhibit G to the supporting affidavits which is the Minutes of a Meeting of the Directors of the 2nd Defendant held on 17 May 1994. He relied on the second paragraph of a resolution reading as follows:

"That Mr. John Nichols reserves the right to makisions to dispose assets ofts of the Company and such a decision be beneficial to all parties."

Mr. Sharma submitted that thiolution amounted to a contractual fetter on the rights of the majority shareholder i.e. the. the 2nd Defendant. In support of this submission he cited British Murac Syndicate Limited v. Alperton Rubber Company Limited [1915] 2 Ch. 186.

In my opinion Mr. S's submission suffers from two major defects. The first is that "a decision beneficialicial to all parties" must refer to parties qua members of the Company not qua employees. The second is that as distinct from the facts in British Murac Mr. Sharma was unable to point to any consideration which might elevate a resolution passed at a meeting of the 1st Defendant into a contractual obligation binding the parties.

I have considerable sympathy with the Plaintiffs who obviously dearly wo persist with and make a se a success of the resort venture but having considered the papers before me and heard counsel I am not satisfied that they have established a good arguable claim to restrain the Defendants from exercising the powers vested in them. In these circumstances the application fails and is dismissed.

M.D. Scott

Judge

30 January 1997

Hbc0324d.96s