ACTION NO. HBC 0166 OF 1999
R.A. Smith for the Plaintiff
No Appearance for the Defendant
The application which appears to be the first of its kind in Fiji seeks what is now called an "anti-suit injunction" and
to understand the present proceedings it is necessary to refer first to the history of this litigation.
The Writ of Summons in this action was issued on the 9th of April 1999 and was served on the Defendant on the 12th of April in Perth.
The Statement of Claim alleges that the Plaintiff is a Company duly incorporated under the laws of Fiji and having its registered
office in Suva. It carries on the business of gold mining and exploration and has a mine on the island of Vanua Levu.
The Defendant is a Company incorporated in the Commonwealth of Australia and is an unsecured creditor of the Plaintiff.
As a result of financial difficulties the Plaintiff proposed a scheme of compromise with its unsecured creditors pursuant to Section
208 of the Companies Act Cap. 240.
On 14th October 1998 this Court ordered a meeting of the Plaintiff's unsecured creditors to be held on the 29th of October 1998 for
the purpose of considering, and if thought fit, approving the scheme. The Defendant was invited to the meeting and was represented
at it but refrained from taking part in the voting.
The remaining unsecured creditors at the meeting unanimously approved the scheme.
On 10th November 1998 the Plaintiff petitioned the High Court for sanction of this scheme. The Defendant opposed the petition by Summons
seeking inter alia that it be exempted from the scheme or that the scheme be restrained pending the outcome of proceedings by the Defendant against Pacific
Island Gold N.L. as First Defendant, Nationwide Pacific N.L. as Second Defendant and the Plaintiff as Third Defendant in the Supreme
Court of Western Australia in Civil Action No. 2063 of 1998 on the basis that the Defendant was entitled to have the Plaintiff execute
a charge in its favour. The application was argued before me on the 20th of November 1998.
On 23rd December 1998 I delivered an oral judgment and found that there was no obligation upon the Plaintiff to execute a charge in
favour of the Defendant. I dismissed the Defendant's application and sanctioned the scheme.
On 11th February 1999 the Defendant lodged a proof of debt with the Scheme Administrators pursuant to the scheme without prejudice
to any rights it might have.
The Defendant has continued the Western Australia proceedings against the Plaintiff seeking orders to the effect inter alia that the Plaintiff execute a charge in favour of the Defendant.
The Statement of Claim then alleges that the Defendant intends, unless restrained from doing so to continue the Western Australia
proceedings against the Plaintiff.
In the circumstances the Plaintiff alleges that the Defendant's actions are an interference with the jurisdiction of the High Court
of Fiji and/or are frivolous and vexatious.
The Plaintiff therefore claims an injunction restraining the Defendant from continuing the Western Australia proceedings against the
Plaintiff and costs of the action.
There has been no appeal by the Defendant against my judgment of 23rd December 1998.
Furthermore the Defendant has not served on Mount Kasi any Notice of Intention to Defend the Writ of Summons or any defence to the
Statement of Claim.
From the foregoing it is clear first that the Plaintiff has a registered office in Fiji; secondly that it has a goldmine in Fiji,
thirdly that it attended the meeting of creditors and fourthly that a proof of debt has been submitted under protest.
I do not propose to refer in any detail to the reasons given in my judgment of the 23rd of December 1998 but I discussed the submissions
that had been made to me and my reasons for accepting and rejecting them. However two of my findings are relevant to the present
application. The first was that in the circumstances there was no obligation upon the Plaintiff to execute a charge and that, accordingly,
specific performance could not be ordered against the Plaintiff. I also found that Range Resources had taken no legal steps to enforce
its alleged right for 8 years, during which the Plaintiff continued to trade, became insolvent and proposed a scheme of compromise
to its unsecured creditors which scheme had been unanimously approved. In the circumstances, I found Range Resources guilty of laches.
THE LAW ON ANTI-SUIT INJUNCTIONS
In making my findings on the law I express my thanks to counsel for the Plaintiff for his very helpful submissions and references
to two Law Journals one of which, the Australian Law Journal, is available in the High Court Library but the other, International
Litigation News is not. These two Journals contain a helpful summary of the history and case law on this subject. In particular the
July 1998 issue of International Litigation News refers to a recent decision of the High Court of Australia - CSR v. Cigna Insurance Australia Limited reported in 1997 71 ALJR 1143, the judgment of the Court being delivered on the 5th of August 1997. The International Litigation
News refers both to this decision and a very recent decision of the House of Lords in Airbus Industrie GIE v. Patel in which on the 2nd of April 1998 the House of Lords overturned the decision of the Court of Appeal and discharged an injunction
granted by that Court restraining proceedings brought in Texas arising out of the crash of an Indian Airlines jet in India. I shall
refer to both these cases shortly but here state that the Plaintiff brings its present application under Order 13(6), Order 19(7)
and Order 65(9) of the High Court Rules, the application of which it contends relieves the Plaintiff from complying with Order 32(3)
of the rules. I set out these rules hereunder:
Order 13(6) states:
"(1) Where a writ is indorsed with a claim of a description not mentioned in rules 1 to 4 then, if any defendant fails to give
notice of intention to defend, the plaintiff may, after the prescribed time and, if that defendant has not acknowledged service,
upon filing an affidavit proving service of the writ on him and, where the statement of claim was not indorsed on or served with
the writ, upon serving a statement of claim on him, proceed with the action as if that defendant had given notice of intention to
defend.
(2) Where a writ issued against a defendant is endorsed as aforesaid, but by reason of the defendant's satisfying the claim or complying
with the demands thereof or any other like reason it has become unnecessary for the plaintiff to proceed with the action, then, if
the defendant fails to give notice of intention to defend, the plaintiff may, after the prescribed time, enter judgment with the
leave of the Court against that defendant for costs.
(3) An application for leave to enter judgment under paragraph (2) shall be by summons which must, unless the Court otherwise orders,
and notwithstanding anything in Order 65, rule 9, be served on the defendant against whom it is sought to enter judgment."
Rules 1-4 of Order 13 refer to claims for a liquidated demand, unliquidated damages, detention of goods and possession of land.
Order 19(7) reads so far as relevant:
"(1) Where the plaintiff makes against a defendant or defendants a claim of a description not mentioned in rules 2 to 5, then,
if the defendant or all the defendants (where there is more than one) fails or fail to serve a defence on the plaintiff, the plaintiff
may, after the expiration of the period fixed by or under these Rules for service of the defence, apply to the Court for judgment,
and on the hearing of the application the Court shall give such judgment as the plaintiff appears entitled to on his statement of
claim."
And sub-rule 3 reads:
"An application under paragraph (1) must be by summons or motion."
Order 65(9) is in these terms:
"Where by virtue of these Rules any document is required to be served on any person but is not required to be served personally
or in accordance with Order 10, rule 1(2) and at the time when service is to be effected that person is in default as to acknowledgment
of service or has no address for service, the document need not be served on that person unless the Court otherwise directs or any
of these Rules otherwise provides."
The Plaintiff contends that the present proceedings being a Notice of Motion for leave to enter judgment are covered by Order 65 Rule
9 and consequently the Notice of Motion is not required to be served personally. I accept that submission.
PRINCIPLES GOVERNING STAY OF PROCEEDINGS ON GROUNDS OF FORUM NON-CONVENIENS AND THE GRANT OF ANTI-SUIT INJUNCTIONS AND THE HISTORICAL
BASIS OF THE GRANT OF ANTI-SUIT INJUNCTIONS
The practice of granting anti-suit injunctions has developed considerably during the last 15 years and owes its origin to the practice
of the old Chancery Court to grant a common injunction to protect the process of that Court against interference by the processes
of other Courts. Such injunctions were not directed to the Courts of common law, as was the prerogative Writ of prohibition, but
were in the form of an order operating in personam on the conscience of the party proceeding or proposing to proceed at common law,
directing it to desist therefrom.
In 1855, in Carron Iron Co. v. Maclaren [1855] EngR 700; (1855) 5 HLC 416, the House of Lords reviewed the previous anti-suit injunction cases. In particular, the Lord Chancellor stated:
"There is no doubt as to the power of the Court of Chancery to restrain persons within its jurisdiction from instituting or prosecuting
suits in foreign courts, wherever the circumstances of the case make such an interposition necessary or expedient. The Court acts
in personam, and will not suffer anyone within its reach to do what is contrary to its notions of equity, merely because the act
to be done may be, in point of locality, beyond its jurisdiction."
The equitable foundation of the jurisdiction was also well stated by Atkin L.J. in 1928 in Ellerman Lines Ltd v. Read (1928) 2 KB 144 at p.155, a case where proceedings had been commenced and judgment obtained in Turkey in breach of contract.
An injunction was granted to restrain the enforcement of the judgment not merely in England but anywhere in the world. Atkin L.J.
said:
"If the English Court finds that a person subject to its jurisdiction has committed a breach of covenant, or has acted in breach
of some fiduciary duty or has in any way violated the principles of equity and conscience, and that it would be inequitable on his
part to seek to enforce a judgment obtained in breach of such obligations, it will restrain him, not by issuing an edict to the foreign
Court, but by saying that he is in conscience bound not to enforce that judgment for commence or maintain proceedings."
The Courts have eschewed attempts to categorise the cases or circumstances in which anti-suit injunctions may be granted - Aerospatiale [1987] UKPC 12; (1987) AC 871 at 892 but the decisions show that anti-suit relief has been granted (a) in equity's exclusive jurisdiction or (b) in its auxiliary
jurisdiction.
In addition, as was emphasised by the High Court of Australia in CSR Ltd. v. Cigna Insurance Australia Ltd. the grant of an anti-suit injunction may be founded in the Court's inherent jurisdiction where it is necessary for the protection
of the Court's proceedings or processes (1997) 71 ALJR 1165-6.
In order to warrant the grant of an anti-suit injunction in the exclusive jurisdiction it will be generally necessary to demonstrate
that the institution or maintenance of the foreign suit was or is vexatious or oppressive.
The commencement of proceedings in a forum having little or no connection with the subject matter of the dispute is generally regarded
as an indication of vexatiousness or oppression whether subjectively intended or as a necessary consequence of such proceeding -
Aerospatiale at 894.
In CSR v. Cigna, Brennan C.J. (dissenting) stated that it is vexatious or oppressive for a party to seek to enforce a liability in a foreign court
where that is not a natural forum for determining the issue in question. This issue was not dealt with directly by the majority joint
judgment which concentrated mainly upon the fact that there was certain relief in the form of treble damages available claimed in
the foreign forum which was apparently not available in the Australian Court.
THE RULE OF COMITY IN THE GRANT OF ANTI-SUIT INJUNCTION
The reported decisions of the English, Canadian, US Circuit Courts and the Australian Courts leave no doubt that a court asked to
grant anti-suit injunctive relief should be sensitive to the foreign court because of the possible perception of interference in
that Court's processes but reading the various authorities it seems that considerations of comity are relevant but are no more than
a matter to be weighed by a trial judge in the overall exercise of his or her discretion.
Reference is made in both CSR v. Cigna and Airbus to various Canadian and US authorities among them being the decision of the Supreme Court of Canada in Amchem Products Inc. v. Workers Compensation Board (1993) 1 SCR 897 in which it was held that prior to the local court entertaining an application for anti-suit relief it was "preferable"
as being "consonant with the principles of comity" that the Applicant for such relief should first have sought a stay or
termination of the foreign proceedings from the foreign court but this decision has been criticised in an article "The Anti-suit
Injunction" in 71 ALJR in December 1997 by Dr. Andrew S. Bell and Mr. Justin Gleeson who appeared as junior counsel for the
Respondents in CSR Ltd. v. Cigna Insurance Australia Ltd. The authors argue that the "preferable course" stated in Amchem was based upon a major and untested assumption, namely that the foreign court would be insulted if proceedings pending before it
are restrained. They say that this assumption has been and should be questioned, especially in circumstances where the court issuing
the injunction makes plain the reasons for its decision, focusing as they must on the Defendant's unconscionable conduct, and the
basis for the grant of the relief entails no criticism of the foreign court. In this proposition they cite two American cases and
one New South Wales case CSR Ltd. v. New Zealand Insurance Company Limited (1994) 36 NSWLR 138. They also argue that Amchem failed to refer to the long line of cases in which anti-suit injunctions have been granted, either in the court's auxiliary jurisdiction
or in its exclusive jurisdiction, without there being any requirement of first seeking a stay from a foreign court.
The High Court in CSR v. Cigna did not adopt the Amchem approach. The majority judgment declined to adopt the Amchem approach as a general rule and indicated, importantly in my view in the present case, that Amchem has no application where the foreign proceedings clearly constitute conduct entitling the Applicant to equitable relief or where
the injunction is sought to protect the integrity of the local proceedings or the processes of the local court.
The majority judgment recognised that where the anti-suit injunction is sought to protect the proceedings or processes of the local
court no question arises whether that court is an appropriate forum for the resolution of the issue: it is the only court with any
interest in the matter. The majority also confirmed that an anti-suit injunction should be used sparingly having regard to considerations
of international comity, but was nevertheless part of the court's equitable jurisdiction to prevent injustice and to protect the
proper exercise of jurisdiction of Australian courts.
Generally speaking this was the approach adopted by the House of Lords in the Airbus decision of 2nd of April 1998. The judgment stated as a general rule that before an anti-suit injunction can properly be granted
by an English Court to restrain a person from pursuing proceedings in a foreign jurisdiction, comity required that the English forum
should have a sufficient interest in or connection with, the matter in question to justify the indirect interference with the foreign
court which an anti-suit injunction entails. In an alternative forum case this will involve consideration of whether the English
Court is the natural forum for the resolution of the dispute.
Applying these principles to the facts of the instant case I am satisfied that this court is the natural forum for the resolution
of the dispute based on the facts I have enumerated above namely the fact that the Plaintiff is a registered company in Fiji; that
its business also is based in Fiji; that the decision of this court approving the scheme of arrangement has not been appealed by
the Defendant and lastly that the Defendant has not served on the Plaintiff either an intention to defend the Writ of Summons or
any defence to the Statement of Claim. For these reasons I grant the orders sought in the Notice of Motion as follows:
(1) Judgment is entered for the Plaintiff against the Defendant for an injunction restraining the Defendant by itself, its servants,
agents or otherwise howsoever from continuing Civil Action No. 2063 of 1998 in the Supreme Court of Western Australia against the
Plaintiff;
(2) The Defendant is to pay the Plaintiff's costs of this application to be taxed in default of agreement.
JOHN E. BYRNE
JUDGE
Authorities and cases referred to in Judgment:
High Court Rules Order 13(6), 19(7)(3) and 65(9).
Amchem Products Inc. v. Workers Compensation Board (1993) 1 SCR 897.
Carron Iron Co. v. Maclaren [1855] EngR 700; (1855) 5 HLC 416.
CSR Ltd. v. Cigna Insurance Australia Limited (1997) 71 ALJR 1143.
CSR Ltd. v. New Zealand Insurance Company Limited (1994) 36 NSWLR 138.
Ellerman Lines Ltd. v. Read (1928) 2 KB 144 at p.155.
Hbc0166j.99s
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/fj/cases/FJHC/1999/83.html
