It su that the Plaintiffs had defaulted in their payments under the security documents which ledh led to the defendant making a demand.
Despite the restructuring of repayment of the loan the second Plaintiff continued to make defaults. As at 24 January 1997 the debt
stood at $360,033.97 and interest accrues thereon at the rate of 8% per annum on the first $200,000.00 and 13.5% per annum on the
balance sum.
The defendant further states that the Plaintiffs have not made any arrangements to pay the debt due and that the defendant Bank is
justified in exercising its rights under the securities to recover the monies owing by the second Plaintiff. It argues that rent
collected from the mortgaged property could be paid to the Bank to reduce the debt but that is not being done.
Dealing with leave application
Dealing with the Plaintiffslication for leave to appeal against the said interlocutoryutory Order, I am of the view that leave is
not required to be sought in this action; but if one is required to be given Courts are guided by the following principles and I
would not have granted it in this case.
On appeals from interlocutory orders, in the Court's judgment in EX PARTE BUCKNELL [1936] HCA 67; 1936 56 C.L.R. 221 at 226 it is stated:
"At the same time it must be remembered the prima facie presumptiomption is against appeals from interlocutory orders, and, therefore,
an application for leave to appeal under sec.35(1)(a) should not be granted as of course without consideration of the nature and
circumstances of the particular case. It would be unwise to attempt an exhaustive statement of the considerations which should be
regarded as a justification for granting leave to appeal in the case of an interlocutory order, but it is desirable that, without
doing this, an indication should be given of the matters which the court regards as relevant upon an application for leave to appeal
from an interlocutory judgment."
It goes on to state at p.225 that:
"Butstatement of the matters which would justify granting leaveleave to appeal must be subject to one important qualification
which applies to all cases. It is this. The court will examine each case and, unless the circumstances are exceptional, it will not
grant leave if it forms a clear opinion adverse to the success of the proposed appeal."
Leave to appe not readily given and in this regard the PRESIDENT, FIJI COURT OF APPEAL ( (SIR MOTI TIKARAM) in KELTON INVESTMENTS LIMITED AND TAPPOO LIMITED and CIVIL AVIATION AUTHORITY OF FIJI & MOTIBHAI & COMPANY LIMITED) (Civ. App. 51/95) said:
"The Courts have thrown their weight against ap from interlocutory orders ders or decisions for very good reasons and hence
leave to appeal are not readily given. Having read the affidavits filed and considered the submissions made I am not persuaded that
this application should be treated as an exception. In my view the intended appeal would have minimal or no prospect of success if
leave were granted. I am also of the view that the Applicants will not suffer an irreparable harm if stay is not granted."
Constion of stay application
The Plaintiffs are applying for a stay of proceedings pending the hearing etermination of the appeal peal against the interlocutory
order refusing their injunction.
The facts are set outhe decision appealed from and the gist of the argument can be ascertained from the submissimissions of both counsel
referred to hereabove.
I have in the decisions appealed from clearly stated at page 11 that "I consider that this is a case in which the appropriate remedy is not interlocutory injunction but an award of damages and the
defendant would be in a financial position to pay them"; I also said that cancellation of importation licence did not have anything to do with the defendant so the Plaintiffs cannot blame
the defendant for their inability to meet their commitments under the security documents.
I had said that "I am driven to the conclusion that the Plaintiffs have not laid the proper basis for their claims on which to have the interim
injunction continue" (page 8 of decision).
There at page had quoted a passage from LORD DENNING in HUBBARD v VOSPER (1972) 2 WLR 389 on the principles of granting an injunction which is as follows which I considered was pertinent to the issue before me:
"In considering whether to grant an interlocutory injunctiunction, the right course for a judge is to look at the whole case.
He must have regard not only to the strength of the claim but also to the strength of the defence, and, then, decide what is best
to be done. Sometimes, it is best to grant an injunction so as to maintain the status quo until the trial. At other times, it is
best not to impose a restraint upon the defendant but leave him free to go ahead. For instance, in Fraser v Evans [1969] 1 QB 349, although the plaintiff owned the copyright, we did not grant an injunction because the defendant might have a defence of fair dealing.
The remedy by interlocutory injunction is so useful that it should be kept flexible and discretionary. It must not be made the subject
of strict rules."
I concluded as follows (page 15 of decision) when I gave the decision:
"Having analyzed the affidavit eve before me in this case anse and applying the principles stated by LORD DIPLOCK, I am of the
opinion that damages as a remedy is sufficient in this case. I do not find that there are any serious questions to be tried to grant
an injunction.
On the facts and circumstances of this case, it is not a proper case for the grant and for the continuation of the interlocutory injunction
or to maintain the status quo until the trial of the action. The grounds are not strong enough to prevent the exercise by the defendant
(FDB) of its powers under the security documents and without any proper variation of any of the covenants in the documents any heed
could be given to the arguments put forward by the Plaintiffs for the purposes of this application. It will open the floodgates if
I were to accede to the continuance of the injunction in cases of this nature involving mortgagees. The Plaintiffs overlook the terms
and the covenants to which they found themselves engaged when they executed the security documents.
Having considered the aforesaid authorities I have come to t to the conclusion that there ought not to be an injunction from today
until the trial as the Plaintiffs have no right to the continuance of the interim injunction they obtained. I ought in my view to
discharge the injunction, and this I do with costs against the Plaintiffs which are to be taxed unless agreed."
I do not propose to rehearse what Mr. Shankar set out in his written submissionmost of it comprises of attf attack on my decision
and that is for the Court of Appeal to consider and not pertinent to this application.
The defendant has sworn an affidavit refuting the allegations of the Plaintiffs.
On thnting of an order for stay of the said order, the court has "an absolute and unfettnfettered discretion" in that regard "and will, as a rule, only grant a stay if there are special circumstances, which must be deposed to on affidavit unless the
application is made at the hearing" (Halsbury's 4th Ed. Vol. 17 para. 455). These "special circumstances" must tend to show that the Respondent/Defendant in this case if it were defeated would be unable to satisfy the judgment.
On the exercise of discretion and 'special circumstances', in FEDERAL COMMISSIONER OF TAXATION v MYER EMPORIUM LTD (NO. 1) [1986] HCA 13; (1986) 160 C.L.R. 220 at pp. 222-3 DAWSON J said:
"It is well established by authority that the discretion which it confers to order a stay of proceedings is only to be exercised
where special circumstances exist which justify departure from the ordinary rule that a successful litigant is entitled to the fruits
of his litigation pending the determination of any appeal: see, e.g. The Annot Lyle [1886] UKLawRpPro 31; (1886) 11 P.D. 114, at p. 116; Scarborough v. Lew's Junction Stores Pty. Ltd. [1963] VicRp 20; [1963] V.R. 129, at p. 130. Special circumstances justifying a stay will exist where it is necessary to prevent the appeal, if successful, from being
nugatory: see Wilson v. Church (No. 2) [1879] UKLawRpCh 233; (1879) 12 Ch. D. 454, at p. 458; Klinker Knitting Mills Pty. Ltd. v. L'Union Fire Accident and General Insurance Co. Ltd. [1937] VicLawRp 12; [1937] V.L.R. 142."
The test applied by ADAMS J in SCARBOROUGH (supra) at p.130 is "whether there is a real risk that the appeal would prove abortive if the applicant were not granted a stay." Similarly it was held in CELLANTE and Another v G. KALLIS INDUSTRIES PTY LTD and Others [1991] VicRp 98; (1991) 2 V.R. 636 that:
"the power to order a stay of execution ise exercised only where spec special or exceptional circumstances exist. Such circumstances
will exist where there is a real risk that the appeal, if successful, will be rendered nugatory".
Examples of situation where appeal cou rendered nugatory is stated by DAWSON J< in THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA AND THE MYER EMPORIUM LIMITED (supra) at p.223 as follows:
"ally that will occur when, because of the respondent's fina financial state, there is no reasonable prospect of recovering
moneys paid pursuant to the judgment at first instance. However, special circumstances are not limited to that situation and will,
I think, exist where for whatever reason, there is a real risk that it will not be possible for a successful appellant to be restored
substantially to his former position if the judgment against him is executed: see McBride v Sandland [No. 2] [1918] HCA 59; (1918) 25 C.L.R. 369 at p. 375."
Conclusion
I have carefully considered the princippplicable to an application for a stay of proceedings.
The facts of this case have been considered by me noy in the decision appealed from but also in this applicatiocation. Before coming
to the decision in this case I have given great weight to the following passage from the judgment of DIPLOCK J in AMERICAN CYNAMID CO v ETHICON LTD [1975] UKHL 1; (1975) A.C. 396:
".... to protect the plaintiff against injury by violaof his right for which hich he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial; but the plaintiff's need for such protection
must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented
from exercising his own legal rights for which he could not be adequately compensated under the plaintiff's undertaking in damages
if the uncertainty were resolved in the defendant's favour at the trial. The court must weigh one need against another and determine
where "the balance of convenience" lies". (emphasis mine)
This is not a case of Plaintiffs not being put back in the same position if the judgment is executed. The defendant's security documents
are intact with which I see no justification to interfere with by granting an injunction just because the Plaintiffs are alleging
that "right from the inception of the transaction the defendant owed duty of care to plaintiff and it failed to discharge it as expected
by an indigenous Fijian from Government established Bank ....".
If stay was granted the defendant will be greatly prejudiced. It is owed a huge sum of money under the mortgages and the debt is increasing
day by day with interest accruing on it at the rate of 13.5% per annum with no indication in sight whatsoever when it will be paid
nor is there any suggestion how the Plaintiffs propose to reduce the debt. They are receiving rent from the secured properties but
none of it has ever come to the defendant.
They have not shown their bona fides by makayment and despite that they still very vehemently want to t to contest the action in which
they allege that the defendant has failed to exercise "duty of care" towards them. I would have very seriously considered the granting a stay had the Plaintiffs offered to deposit at least half the
debt in the sum of $150,000.00 into Court.
This is not a casee the Plaintiffs will be "ruined" if stay is not granted. If the Plaintiffs succesucceed they can be compensated
for in damages which the defendant is in a position to pay and that is not in doubt.
In the outcome, for the above re, applying the principles pertaining to the grant or refusaefusal of a stay, I find this to be a classical
case for the refusal of a stay. The application for stay is therefore refused with costs against the Plaintiffs to be taxed if not
agreed.
D. Pathik
Judge
At Suva
14 March 1997
Hbc0006r.96s
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