Patel v Patel [1999] FJHC 171; HBC312.1999 (30 November 1999)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

ACTION NO: HBC 312 OF 1999

BETWEEN:

ARVIND LAL MOTIBHAI PATEL
Plaintiff

AND:

KALAWATI BEN PATEL
1st Defendant

SATIS KUMAR PATEL
2nd Defendant

PANKAJ PATEL
3rd Defendant

Counsel: Mr M. Young for the Plaintiff
Mr S. Parshotam for the Defendants

Hearing: 12th November 1999
Decision: 30th November 1999

DECISION

On 29th June 1999, the Plaintiff moved the High Court by summons to issue Writ of Summons out of jurisdiction on the 1st, 2nd and 3rd Defendants, and to restrain the ANZ Bank in Suva and/or G. Lal & Co. from remitting the sum of $0.575 million from Fiji to the 1st Defendant’s account in Australia.

An order was made in terms of the summons on 30th June 1999, with a further order that the applications were to be made inter-partes on 19th July 1999. On the 19th of July 1999 the Defendants filed acknowledgement of service without prejudice to their right to apply to set aside the writ, and to dispute the jurisdiction of the court.

On 7th September 1999, the Defendants filed summons to set aside the writ of summons filed by the Plaintiff, to discharge the interim injunction preventing remittance of $0.575 million to Australia, requesting a declaration that the court has no jurisdiction over the matter, and asking for costs. The application was filed pursuant to Order 12 Rule 7 of the High Court Rules 1988.

This decision is in respect of the orders sought by virtue of the summons of 7th September 1999.

The writ of summons filed by the Plaintiff on 1st July 1999 sets out the basis for his claim. The writ claims that in 1993 the Plaintiff had commenced legal proceedings against Nodhana Limited, Mahendra Motibhai Patel and Prabhudas Bercharbhai Patel in Civil Action No. 162 of 1992. In Action No. 163 of 1993, the Plaintiff’s brother, Chimanbhai Motibhai Patel also commenced legal proceedings against the same parties. When Chimanbhai Motibhai Patel died in 1995, the 1st, 2nd and 3rd Defendants were named Plaintiffs in Action No. 163 of 1993 because they were executrix and beneficiaries of the estate of Chimanbhai Patel. In February 1999, the Plaintiffs and the Defendants agreed to settle both civil actions by way of a Settlement Deed executed by the parties. The sum of $4.15 million was to be paid to the Plaintiffs and the Defendants by Nodhana Limited, Mahendra Motibhai Patel and Prabhudas Bercharbhai Patel.

The Statement of Claim claims that although it was agreed that the parties divide the $4.15 million equally, as a result of undue influence on the Plaintiff by the 2nd and 3rd Defendants, the Plaintiff agreed to accept $1.5 million. In particular, the Plaintiff alleges that the 2nd and 3rd Defendants threatened lengthy and expensive litigation, and that they pressured the Plaintiff’s children with lengthy and expensive litigation that would jeopardise the Plaintiff’s chances of receiving any money at all. The $4.15 million is held at the ANZ Bank at Suva, although attempts had been made to remit the money to Australia. The writ is silent on the location of the parties when the alleged threats and inducements were made. However, the Plaintiff lives in India, and in Australia.

In support of the summons to set aside the writ and for the discharge of the injunction, the Defendants filed the affidavit of Satis Kumar Patel, the 2nd Defendant, sworn on 17th August 1999. That affidavit states that the Plaintiff resides at 46 Sherry Street, Carseldine in Brisbane, Australia. Satis Patel states that there was no agreement to share the $4.15 million equally, but that the agreement was to pay $1.5 million to the Plaintiff, and $2.65 million to the Defendants. He further says that undue influence is denied, but if it took place as alleged, it took place in Australia where the Deed was executed. He states that all discussions as to how the proceeds of the litigation were to be divided took place at the offices of Dennis Cooney, Solicitors in Sydney, Australia. He states that the Plaintiff is a resident of Australia, and owns a house in Brisbane. His three daughters also live in Australia. At paragraph 21 he says that his family resides in Australia and has sufficient assets to cover any judgment against the Defendants. Finally he says that the Plaintiff has no assets in Fiji and would not be able to pay damages and costs payable to the Defendants if the Plaintiff’s claim is unsuccessful.

In his affidavit in reply, sworn on 31st August 1999 the Plaintiff states that the mandatory injunction to prevent remittance of $575,000 abroad was necessary to protect the Plaintiff’s rights. The Plaintiff says that his crucial witness at the substantive hearing will be Mahendra Motibhai Patel who resides in Fiji, but is a reluctant witness. He says that he has been informed by a Mr Vinod Kalyan a legal practitioner in Queensland, that the cost of litigating in Australia would be $50,000 to $80,000 more than the cost of litigating in Fiji. He states that he has already spent money on litigation in Fiji and that he has transferred $30,000 to his lawyers’ trust account as proof of his bona fides as to his undertaking for damages and as security for costs. Finally he says that he has lived in India for a total of 56 weeks over the last 5 years, and only returns to Australia for 10 to 12 weeks per year.

In reply, Satis Kumar Patel in an affidavit sworn on 3rd September 1999 states that he and his brother the 3rd Defendant, have successful businesses in Australia and substantial personal assets. He states that Mahendra Motibhai Patel’s evidence can be of no relevance to the proceedings because he was not a party to the settlement.

Furthermore, if Mahendra Motibhai Patel is a reluctant witness, it is not clear how that can be a ground to grant jurisdiction to the Fiji courts. The affidavit further states that all parties reside in Australia, that all other witnesses reside in Australia and that the total cost of litigation would be less in Australia than it would in Fiji.

Both parties filed written submissions which were well-researched and helpful.

In his submissions, Mr S. Parshotam for the Defendants submitted that the cause of action, of undue influence, was tortuous and that no allegation in tort was made against the 1st Defendant. He submitted that no action in personam lies against a defendant unless he has been served with a writ whilst present in the jurisdiction or unless he has submitted to the jurisdiction. He submitted that the onus is on the applicant to show that it would be right to deprive the Plaintiff of the right to sue in Fiji.

In substance, counsel submitted that the mere presence of $0.575 million in Fiji was insufficient to justify an assumption of jurisdiction by the Fiji courts. He argued that since the Plaintiff and Defendants all reside in Australia, and since the cause of action is in Australia, Fiji is clearly not the appropriate jurisdiction. As to the fear that the Defendants will disperse the money held in Fiji, counsel submits that such fear which is unsupported by evidence, is insufficient to justify commencing proceedings in Fiji.

In response, Mr M. Young submitted that the cause of action was in contract where the Plaintiff is seeking to set aside a contract on the ground of undue influence. He submits that leave to serve the Defendant out of jurisdiction was properly given because by virtue of Order 11 Rule 1(b) the Plaintiff had shown that the injunction in respect of the monies held in Fiji was a genuine part of the substantive relief sought. The effect of the injunction is that the High Court has jurisdiction over the funds. Furthermore, the freeze on the funds which is part of the settlement money, will enable the Plaintiff to enjoy the fruits of his judgment, and which the Plaintiff says, is the only final relief sought. This, says counsel, is why Fiji is the more convenient forum for the hearing of the case. Other reasons to justify the choice of Fiji for jurisdiction is the relevance and necessity of Mahendra Patel’s evidence and the cost of litigation in Australia.

The Plaintiff also resists the discharge of the interlocutory injunction granted on 29th June 1999 and says that there was an urgency in preventing repatriation of the funds, there is a good cause of action and a serious question to be tried and that the balance of convenience favours the grant of the injunction.

Order 12 Rule 7 of the High Court Rules 1988 provides:

“(1) A defendant who wishes to dispute the jurisdiction of the court in the proceedings by reason of ...... irregularity ...... or on any other ground shall give notice of intention to defend the proceedings and shall, within the time limited for service of a defence apply to the court for:

(a) an order setting aside the writ or the service of the writ on him; or

(b) an order declaring that the writ has not been duly served on him; or

(c) the discharge of any order giving leave to serve the writ on him out of the jurisdiction; or

(d) the discharge of any order extending the validity of the writ for the purpose of service; or

(e) the protection or release of any property of the defendant seized or threatened with seizure in the proceedings; or

(f) the discharge of any order made to prevent any dealing with any property of the defendant; or

(g) a declaration that in the circumstances of the case the court has no jurisdiction over the defendant in respect of the subject matter of the claim or the relief or remedy sought in the action; or

(h) such other relief as may be appropriate.”

It is clear, that if the court finds for the Defendants on the issue of jurisdiction, and if the writ is set aside, the injunction must therefore be dissolved, as the purpose of it is to prevent money which is the subject of the writ, from being dissipated.

I note that Clause 4.12 of the Deed of Settlement, annexed to the affidavit of Arvindlal Motibhai Patel states that:

“This agreement is governed by, and is to be construed in accordance with, the laws of Fiji and the parties submit to the non-exclusive jurisdiction of the courts of Fiji and any court hearing appeals from those courts.”

I also note that there is no real dispute that the cause of action, whether it be in contract or in tort, arose abroad.

Now that leave has been granted for service of the writ out of jurisdiction, the onus is on the Defendants to satisfy the court that the writ should now be set aside.

In The Hagen (1908 - 10) All ER 21, the House of Lords referring to the principles relevant to service out of jurisdiction said (per Farwell LJ at p.26):

“the first principle was whether or not a foreigner who owes no allegiance to these courts, should be brought to this country to contest his rights, should be considered a very serious issue. The second principle was, that if there was any doubt about the appropriate jurisdiction, that doubt ought to be resolved in favour of the foreigner. The third principle was that since an ex parte application was normally made for service out of jurisdiction, the fullest disclosure was necessary, and failure to make a full disclosure would justify a discharge of the order.”

In Spiliada Maritime Corp -v- Cansulex Ltd [1986] UKHL 10; (1987) 1 AC 460, Lord Goff said at p.476:

“A stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action.”

He further said -

“.... (where) there is some other available forum which prima facie is clearly more appropriate for the trial of the action a stay will ordinarily be granted unless on a consideration of all the circumstances justice requires that a stay should not be granted. If a plaintiff can show that he will not obtain justice in the foreign jurisdiction, that is of course a powerful reason for refusing a stay since in such a case the foreign forum can scarcely be a more suitable forum for the interests of all the parties and for the ends of justice.”

It was said (per Lord Goff) in the same decision that the onus is on the applicant to establish the conditions for stay, the standard of proof being a high one.

These principles were thoroughly canvassed by Byrne J in Translink Shipping Ltd. -v- Compagni Wallisiene de Navigation Sarl and Michael Dewas Action No. 277 of 1991 who said at p.11:

“The factors which may be considered in the search for the “natural forum” (i.e. that with which the action has the most real and substantial connection) ... include the general undesirability of subjecting to the jurisdiction of English Courts any foreigner who owes no allegiance to England ... the availability of witnesses, the law governing the relevant transactions, and the places where the parties reside or carry on business. If the court concludes that there is a clearly more appropriate foreign forum, it will ordinarily grant a stay unless the Plaintiff proves that it will not obtain justice in the foreign jurisdiction.”

These same principles were applied by the New Zealand Court of Appeal in Longbeach Holdings Ltd. -v- Bhanabhai (1994) 2 NZLR 28.

Turning to the facts of this case, the cause of action arose in Sydney. The Plaintiff resides for a significant part of the year in Australia. The Defendants live in Australia. The witnesses (with one exception) live in Australia. The grounds on which the Plaintiff rests his submission are that the money which is claimed by the writ by way of mandatory injunction, is in Fiji, and that an important witness resides in Fiji.

In Mercedes-Benz AG -v- Leiduck (1995) 3 All ER 925, the Privy Council held that the presence of assets within the jurisdiction justifying the grant of a mareva injunction, was not sufficient to grant the court extra-territorial jurisdiction. The purpose of the injunction was, according to the Privy Council, to prevent an abuse of the courts processes in hearing the substantive action.

The circumstances in this case are comparable to those in Dimskal Shipping Co. -v- I.T.F. (1991) WLR 875 which involved an agreement which was specifically subject to English law, and which, the plaintiffs claimed had been avoided by duress. The House of Lords held the claim was governed by the law of contract and that the court should refer to the country where the duress took place to determine the issue. The duress alleged had taken place in Sweden, and was not unlawful under Swedish law.

In The Universal Pentinel (1983) 1 AC 366, Lord Diplock said at p.385:

“The use of economic duress to induce another person to part with property or money is not a tort per se; The form that the duress takes may, or may not be tortuous: The remedy to which economic duress gives rise is not an action for damages but an action for restitution of property or money exacted under such duress and the avoidance of any contract that had been induced by it; but where the particular form taken by the economic duress used is itself a tort, the restitutional remedy for money had and received by the defendant to the plaintiff’s use is one which the plaintiff is entitled to pursue as an alternative remedy to an action for damages in tort.”

In Dimskal Shipping (supra) Lord Goff said at page 886, after considering The Universal Pentinel:

“It follows therefore, that, prima facie at least, whether or not economic pressure amounts to duress sufficient to justify avoidance of the relevant contract by the innocent party is a matter for the proper law of the contract, wherever that pressure has been exerted.”

In the present case, it is not clear where the pressure is alleged to have been exerted. It is not suggested that it was exerted in Fiji. However what is relevant for the purpose of this application, is which contract is being avoided? The writ of summons suggests that it is a subsequent verbal contract varying the Deed of Settlement. The issue therefore appears to be whether the verbal contract can now be avoided on the ground of duress. The writ does not involve a construction of the Deed itself, and Clause 4.12 of the Deed has therefore limited relevance in deciding the convenient forum for trial. It is clear that neither the verbal agreement, nor the alleged duress took place in Fiji.

In all the circumstances I am satisfied that the Defendants have discharged the burden on them to show that Australia is the appropriate jurisdiction to hear this case. I note that the $2.65 million was to be remitted to the 1st Defendant’s account in Australia, in any event. There is nothing to prevent the Plaintiff seeking an injunction in Australia to freeze the funds pending the outcome of the case. Further, I am satisfied that the presence of a reluctant witness in Fiji, who appears to be a constant traveller to Australia in any event, is not sufficient ground to hold a trial in Fiji.

Finally I note that it is not suggested by the Plaintiff that he will not obtain justice in Australia.

In all the circumstances, I order that the writ of summons dated 1st July 1999 be set aside and that the interim injunction made on 29th June 1999 be discharged. The Plaintiff is to pay costs to the Defendants in respect of this application to be taxed if not agreed.

Nazhat Shameem
JUDGE

At Suva
29th November 1999