Qing Li v Petri [2000] FJHC 142; Hbc0340.1995 (8 December 2000)

IN THE HIGH COURT OF FIJI
(AT SUVA)
CIVIL JURISDICTION

ACTION NO. HBC 340 OF 1995

BETWEEN:

QING LI
of Nakasi, Nasinu 9 Miles, Businessman
Plaintiff

AND:

JOHANNES GEORG PETRI
of Deuba, Navua, Businessman
First Defendant

AND:

SUNFRUIT (FIJI) LIMITED
a limited liability Company having its
registered Office at Crosbie &
Company, Chartered Accountants, Nadi
Second Defendant

S. Sakimi for the Plaintiff
M. Prakash for the proposed Third Defendant
D. Singh for the proposed Sixth, Seventh and Eighth Defendants
No appearance for the other proposed Defendants

Dates of Hearing and Submissions: 3rd August, 1998,
19th November 1999, 2nd October 2000
Date of Ruling: 8th December 2000

RULING

The file in this matter is at the moment 10 cm thick. Unless drastic action is taken in the near future I have no doubt it will become even thicker, a prospect which fills me with considerable foreboding. The action has meandered its way through the Court list after it was begun by a Writ of Summons issued on the 20th of July 1995. The Indorsement of Claim alleges that the Plaintiff was at all times material the owner of a commercial fishing vessel called M.V. "Vatunawa" situated at Navutu in Lautoka. The Plaintiff claims to be the owner of the fishing equipment and associated materials on the vessel.

He alleges that on or about 14th of July 1995 the Defendant had the vessel and its equipment sold under auction by the Government Auctioneer pursuant to a Writ of Fieri Facias issued in Civil Action No. HBC 533 of 1994S in which the Defendant was the Judgment Creditor and Dragon Seafood (Fiji) Limited was the Defendant. The Indorsement continues that Dragon Seafood was never at all material times the owner of the vessel and its equipment and that therefore the Writ of Fieri Facias was wrongfully enforced against the Plaintiff's property. The Plaintiff alleges that at the auction the Defendant successfully bid for the property for $55,000.00. The Plaintiff claims that the fishing vessel was the Fishing Company's sole asset and was valued at $64,996.00.

Later on the 8th of September 1995 the Plaintiff through his then solicitors filed a Statement of Claim.

In this he claims that he assigned the vessel to Dragon Seafood Company ("DSC") in return for shares in DSC. However, he claims this transaction was vitiated by the failure of DSC to obtain Reserve Bank's approval for the shares issued to him. In the last paragraph of paragraph 3 of the Statement of Claim the Plaintiff claims that he was never issued with shares.

I pause here to say that the obvious reason why the Court file is 10 cm thick is because the Plaintiff has filed several book-like affidavits. They are rambling and discursive and make it extremely difficult to understand precisely what the Plaintiff is alleging.

This voluminous material has involved the Court and all the proposed new Defendants in many hours of examination in an effort to decide the matter. On the face of it the Plaintiff's conduct is vexatious and oppressive. I shall return to this subject later but now continue my analysis of the Statement of Claim. The Plaintiff criticises the failure of DSC to obtain Reserve Bank's approval for the shares allegedly issued to him but, it seems, conveniently ignores his own duty as a foreign investor to obtain approval for his investment. Shares were issued to the First Defendant and a man named Minge, both German nationals. The First Defendant and Minge paid for their shares by depositing the payment into DSC's account.

In paragraph 3 of his Statement of Claim the Plaintiff complains that he was never issued with shares yet he says the Company agreed to re-assign the ownership of the vessel and did so on 10th November 1994 by an Instrument of Transfer. This was done by DSC, he claims, because of the failure by DSC to obtain the approval of the Reserve Bank of Fiji for his shareholding. It would appear therefore that the Plaintiff now argues that he was no longer a shareholder from the 10th of November 1994 onwards.

In my judgment the mere refusal of the Reserve Bank to approve the issue of shares to the Plaintiff would not mean that DSC would have to hand back the vessel in lieu of payment in cash for the shares. If DSC still held it, unencumbered to Third Parties, the Plaintiff could claim the return of the vessel. Where the rights of the Third Parties have already been involved, the Plaintiff would have to seek a sum equivalent as compensation for the non-issuance of the shares. Clearly in my view the debt is owed by DSC, not the First Defendant.

The Plaintiff's claim, however has been brought against the First Defendant. In view of the affidavits of the Plaintiff, the Indorsement of Claim on the Writ was misleading to say the least. The first sentence reads:

"The Plaintiff was and is at all times material the owner of a commercial fishing vessel called M.V. "Vatunawa" situated at Navutu in Lautoka"

Ten lines down the Claim continues:

"The said Dragon Seafood (Fiji) Limited was not and is not at all times material the owner of the said vessel and the fishing equipment and associated materials all of which were owned by me personally."

It follows in my judgment that if the First Defendant lent various sums of money to DSC at the Plaintiff's instigation for completion of works on the vessel, moneys were lent for work on DSC's property, namely the vessel, and not the Plaintiff's property.

I note that on the 26th of April 1995 the Plaintiff deposed in an affidavit in Companies Action No. HBC143 of 1994 "At all material times DSC was the owner of a commercial fishing vessel named M.V. "Vatunawa".

Despite this, paragraph 18 of the Amended Statement of Claim apparently filed on the 6th of August 1997, although it is endorsed "supplementary affidavit", states that during the relevant time the vessel had never been registered or regarded as an asset of DSC but fully as the Plaintiff's own property.

The two statements are irreconcilable.

The purported re-assignment by DSC of the vessel, which was its only asset for works on which Petri had lent moneys secured by the debenture was clearly fraudulent. Having obtained money from the overseas investor with the cash, and the First Defendant having spent it on the Company's only asset, for the Company then to give it away ahead of, and in preference to, the debenture holder, was fraudulent. No other explanation occurs to me.

The present Statement of Claim of 8th September 1995 seeks the return of the vessel M.V. "Vatunawa" owned by the Second Defendant - Sunfruit (Fiji) Limited or its value on the basis of

(a) an instrument of transfer of 10th October 1994 re-assigning the vessel from DSC to the Plaintiff, or

(b) that there was no valid contract, there being no consideration provided, hence the property in the vessel should revert to the Plaintiff.

The proposed Amended Statement of Claim is an extraordinary document. It purports to plead an entirely new action. It ranges far and wide; hence six proposed additional Defendants. It appears to have been drafted by the Plaintiff himself although it is not signed. It rambles on for 128 paragraphs covering 39 pages with a 4-page schedule attached.

It alleges fraudulent conspiracy and abuse of legal proceedings and seeks the return of the vessel and other properties or their monetary equivalent. It also seeks declaratory orders that a Fi. Fa. was wrongly and fraudulently issued.

Paragraph 123 consists of 9 sub-paragraphs and refers to the activities of the Defendants and begins, "All the above clearly reveal the well concealed, designed and lurking fraud and conspiracy on the part of the existing and proposed new Defendants."

Sub-paragraph D claims that the activities of the Defendants both present and proposed were designed to puzzle, baffle and put the Plaintiff in such a complex and perplexed situation so as to prevent the Plaintiff from discovering and investigating their fraud.

I may be pardoned for saying that so far it is not the Plaintiff who is puzzled, baffled and perplexed by the Statement of Claim present and proposed to be amended but this Court. The Amended Statement of Claim bears no resemblance to the first Statement of Claim and as such in my judgment is an abuse of the rules of pleading of this Court. The nature of the alleged concealment is not mentioned.

The Third Defendant rightly asks in my opinion why were these allegations not included in the original Statement of Claim? The Plaintiff must have been aware of them if he is to be believed.

I am driven to the conclusion that the Plaintiff was originally quite content to claim against his former business partner in DSC, namely the First Defendant but then Petri left Fiji. Who then was the Plaintiff to pursue for compensation for his losses? The answer in my judgment is seen in the re-casting of his cause of action so as to admit as many Defendants as possible in the hope that at least some of his allegations could be proved.

In my judgment this is not a genuine application to amend a Statement of Claim, nor is it a proper application for joinder. I regard it as an attempt to harass the proposed Defendants causing them to respond at what I have no doubt a considerable expense both as to their time and financial resources. The Court has an inherent power to prevent such abuses at any stage, where it is felt genuine redress is not the purpose of the litigation. (Willis v. Earl Beauchamp [1886] 11 P.59 per, Bowen L.J. at p.63) The voluminous affidavits make wild accusations but they do not bring to the Court's attention "any evidence to which we could attend" (Willis at 65, per Fry L.J.), nor is fresh evidence deposed to making it imperative to plead fraud or to re-cast the claim in such a radical way. Obviously the Plaintiff regarded Petri as the cause of his alleged loss when he issued these proceedings. His proposed attempt to involve others over two years after the Writ was issued must be regarded as highly suspect.

On the 2nd December 1996 when the Plaintiff sought a speedy trial, he already knew that the First Defendant (according to Minge) had left the country. I accept that the Plaintiff must have felt frustrated at this turn of events and so in my judgment he decided to forget Petri and the application for speedy trial but instead see if he could get some money out of the proposed Defendants.

At present he has an injunction in place. He may continue with his application for speedy trial and proceed on the evidence against the First and Second Defendants and seek judgment for the vessel or its equivalent.

On the question as to whether a duty was owed to the Plaintiff as a Director of DSC by the solicitor acting, I consider there was no such duty other than a duty to act fairly. A duty was however owed to the two parties the debenture, DSC and the First Defendant, the lender. I am told and accept that in preparing the debenture, the solicitor took proper instruction from persons having ostensible authority for the Company. These included the Company's Accountant, the Company Secretary, the Plaintiff as Director and from the First Defendant as Finance Director. Necessary resolutions were passed.

In paragraph 63 of the proposed Amended Statement of Claim the Plaintiff says that on the 10th of October 1994 it was resolved to transfer the vessel back to him while the Plaintiff continued to act as a shareholder and Director of the Company.

The Plaintiff accepts there was no other asset of the Company but the vessel. It would appear that on or about the 26th of August 1994 Petri had paid the Plaintiff the final $3,000.00 to complete the vessel. Arguably the circumstances of the creation of the debenture which was not signed by the Plaintiff after accepting the money and the Plaintiff's conduct thereafter cast certain doubts on the bona fides of the Plaintiff and as such suggest that he was not duped by the First Defendant, his lawyer and all of the proposed Defendants. In my judgment the proposed amendments to the Statement of Claim and Joinder of the Third Defendant are vexatious and oppressive.

I pass finally to the position of the proposed Sixth, Seventh and Eighth Defendants. Section 3(5) of the State Proceedings Act Cap. 24 states that:

"No proceedings shall lie against the State in respect, inter alia of torts committed by its servants or agents in respect of any act or omission of a servant or agent of the State."

In Dharmendra Prasad v. The Attorney General of Fiji and the Commissioner of Prisons C.A. No. 17 of 1993 it was held that all the Commissioner of Prisons was required to do was to act on the warrant of committal.

Henderson v. Preston (1888) 21 Q.B.D. was followed where it was held that where the governor of a prison acted within the four corners of a warrant he was immune from an action for false imprisonment.

Henderson's case was applied in Morris v. Winter (1930) 1 K.B. 243. It is submitted in the instant case that all the Defendants were required to do was to act on the Writ of Fieri Facias.

The execution of the Writ of Fieri Facias was not contrary to Section 9 of Fiji's 1997 Constitution which deals with Protection from Deprivation of Property.

In my judgment therefore all the Defendants were required to do was to act on the Writ of Fieri Facias.

The result is that both applications for joinder and Amended Statement of Claim are refused. I order the Plaintiff to pay the costs of the proposed Defendant Gates which I fix at $500.00 and of the proposed Sixth, Seventh and Eighth Defendants which I fix at $150.00.

JOHN E. BYRNE
JUDGE

Cases referred to in Ruling:

Dharmendra Prasad v. The Attorney General of Fiji and the Commissioner of Prisons C.A. No. 17 of 1993.
Henderson v. Preston (1888) 21 Q.B.D.
Morris v. Winter (1930) 1 K.B. 243.
Willis v. Earl Beauchamp [1886] 11 P.59 per, Bowen L.J.