Gokal v D Gokal & Co (HK) Ltd [1998] FJHC 35; Hbc0299j.97s (23 March 1998)

Fiji Islands - Gokal v D Gokal & Co (HK) Ltd - Pacific Law Materials

IN THE HIGH COURT OF FIJI

AT SUVA

CIVIL JURISDICTION

ACTION NO. HBC0299 OF 1997

BETWEEN:

MAGANLAL GOKAL
f/n Gokal for himself and as executor and
trustee of the estate of
DEVCHAND GOKAL f/n Gokal
Plaintiff

AND:

D. GOKAL & CO. (H.K.) LTD
First Defendant

BHAGWAN GOKAL
f/n Gokal
Second Defendant

MAHENDRA GOKAL
f/n Bhagwan Gokal
Third Defendant

VINOD GOKAL
f/n Bhagwan Gokal
Fourth Defendant

P.I. Knight for Plaintiff
H. Lateef for Secod Fourth Defendants

Date of Hearing: 27th October 1997
Date of Judgment: 23rd March 1998

JUDGMENT

I have before me a Summons issued on behalf of the Second and Fourth Defendants for an order that service of the Writ be set aside or the action struck out upon the ground that there is no jurisdiction in this Court to deal with this matter.

The Writ was issued on the 4th of August 1997 and claims against the First Defendant the sum of US$338,318.24 allegedly due on a promissory note dated 15th December 1982 made by the First Defendant payable to the Plaintiff and/or Devchand Gokal when the lien held over the funds by the Hong Kong and Shanghai Banking Corporation Limited was released.

The Writ further alleges that the First Defendant made a promissory note for HK$97,786.40 and US$13,554.80 dated 15th December 1982 payable to the Plaintiff and/or Devchand Gokal when the lien held over the funds by Union Bank of Hong Kong Limited was released.

It is claimed that the liens over the above funds were released in or about 1989 although the Plaintiff did not become aware of this until 1996.

The concluding paragraphs 4, 5 and 6 of the Statement of Claim which are in the alternative against the Second, Third and Fourth Defendants allege that on or about 14th of September 1982 the sum of US$290,329.19 was placed on term deposit with the Hong Kong and Shanghai Banking Corporation Limited in the joint names of the Plaintiff, the Second Defendant, the Third Defendant and the Fourth Defendant and that the Hong Kong and Shanghai Banking Corporation Limited held a lien over such funds.

Paragraph 5 alleges that it was agreed between the Plaintiff and the Second, Third and Fourth Defendants that on release of the above lien the funds would be distributed amongst them so that the Plaintiff would receive at least US$121,067.27.

Paragraph 6 claims that the lien over the above funds was released in or about 1989 although the Plaintiff did not become aware of this until 1996.

The Plaintiff claims the above sum with interest from the 15th of December 1982 until payment or judgment at such rate as the Court may think just.

No defences have yet been delivered by any of the Defendants.

The basis of the application by the Second and Fourth Defendants is that under paragraph 11(b) of a Deed of Settlement made on the 19th of May 1988 between Bhagwan Gokal and Vinod Gokal both of 43 Gordon Street, Suva, Fiji and Mahendra Gokal of 7A Seymour Villa, Hong Kong and Devchand Gokal of 20 McGregor Road, Suva and Maganlal Gokal of 210 Queen Elizabeth Drive, Nasese, Suva only the Supreme Court of Hong Kong can determine the matters alleged in the Writ.

The Deed recites that the parties are desirous of implementing a final settlement of all their rights and liabilities in respect of numerous companies and a firm Mabrukh International named in the three schedules to the Deed in accordance with the provisions of the Deed.

It further recites that to assist in the implementation of such a final settlement the parties have agreed to appoint two arbitrators on the terms and conditions stated in the Deed.

Clause 10(b) of the Deed requires the Second, Third and Fourth Defendants in the present action who are referred to in the Deed as "The First Party" to make arrangements with all relevant banks or financial institutions to procure the release to Maganlal Gokal and Devchand Gokal, the latter now deceased and referred to in the Deed as the "Second Party", no later then 15 months from the date the award of the arbitrators was handed down of all moneys due to them.

Clause 11(b) with which this Summons is concerned states:

"It is hereby agreed and acknowledged that the Supreme Court of Hong Kong shall have jurisdiction with respect to all matters arising out of or pertaining to this Deed."

On the 5th of July 1989 the arbitrators issued their award which the Plaintiff in the present action did not accept.

With the now deceased Devchand Gokal as Co-Plaintiff, Maganlal issued a Writ in the Supreme Court of Hong Kong on the 28th of February 1990 claiming in substance that the Second, Third and Fourth Defendants in the proceedings before me failed to provide the Plaintiff and the deceased Devchand Gokal with certain relevant information required under Clause 8 of the Deed and that such failure has rendered the Deed null and void. They claim in the Writ:

(1) A declaration that the Deed of Settlement is null and void;

(2) Alternatively a declaration that the Deed has been discharged.

I intend no disrespect to either Mr. Lateef or Mr. Knight who argued their clients' cases thoroughly and cogently before me when I say that I have found this matter easy to resolve in that I have no doubt that under Clause 11(b) of the Deed this Court does not have jurisdiction to entertain the present action.

Whilst I accept Mr. Knight's submission based on paragraph 833 of Halsbury's Laws of England, 3rd Edition, Volume 9, repeated in paragraph 729 of Volume 10 of the 4th Edition that the essential requirement is that the Defendant must be resident within the jurisdiction, and that, absent any other factor, this Court has jurisdiction because of the residence of the Second and Fourth Defendants in Fiji, in my judgment that submission does not give proper effect to Clause 11(b).

In my judgment the relevant phrase in 11(b) is "all matters arising out of or pertaining to this Deed". (My emphasis).

In my view it is no answer to the Second and Fourth Defendants to say, as did Mr. Knight, that Clause 11(b) does not in its terms give exclusive jurisdiction to the Supreme Court of Hong Kong so that the Clause does not exclude the High Court of Fiji from having jurisdiction.

In Mr. Knight's submission all Clause 11(b) means is that the parties were given the option of choosing in which Court they wished to sue, not given exclusive jurisdiction to any one Court.

To accept such a submission would in my opinion make Clause 11(b) useless. I consider the present action falls within the scope of the Deed and that only the Supreme Court of Hong Kong has jurisdiction to hear this matter.

Before parting with the Summons I must in deference refer to the second of Mr. Knight's arguments that a consent judgment entered in this Court on 20th of November 1995 between the parties in Action No. HBC493 of 1995 obliges the Defendants to admit this Court's jurisdiction in the present claim; I can only say that I do not agree.

That judgment may have encouraged the Plaintiff to commence this action but I do not regard it as a precedent on which to base the Plaintiff's arguments here. In that action only one of the Plaintiffs was identical, Maganlal Gokal. The First Defendant in the present action was not a party to Action No. HBC493, the First Defendant is a Hong Kong company and trades in Hong Kong and the term deposit in question is held in Hong Kong. In Action No. HBC493 of 1995 the deposit was held in Australia so that the two cases are not identical.

Finally the question of jurisdiction was not raised in Action No. HBC493 for reasons which I need not know. It is only in the present proceedings that the question of jurisdiction has been argued.

For these reasons I grant the orders sought in the Summons of the Second and Fourth Defendants dated the 26th of August 1997 and order that the proceedings in this action be struck out and that the Plaintiff pay the costs of the application.

JOHN E. BYRNE
JUDGE

Authority referred to in judgment:

Halsbury's Laws of England, 3rd and 4th Editions, Volumes 9 and 10.

Hbc0299j.97s