Turner Resorts International Company Ltd v NBF Asset Management Bank [2001] FJHC 233; HBC374.2001 (28 September 2001)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. 374 OF 2001

Between:

TURNER RESORTS INTERNATIONAL
COMPANY LIMITED
Plaintiff

And

NBF ASSET MANAGEMENT BANK
Defendant

Mr. K. Muaror for the Plaintiff
Mr. W. Clarke for the Defendant

DECISION

By ex parte Notice of Motion dated 30 August 2001 supported by an affidavit of Daryl Turner sworn the same day the plaintiff company sought certain orders including:

(3) njunction to restrain the Defendant whether acting by itself or its servants or agents or any of them or otherwise howsoever from advertising, selling, assigning or dealing with all or any of the assigned properties being the subject of and described in the Deed. The assigned properties include but not limited to the following:

(i) ve Leave No. 20436

(4) njunction to restrain the Defendant whether acting by itself or its servants or agents or any of them or otherwise howsoever from advertising, selling, assigning or dealing with all or any of the assigned securities and debts being the subject of and described in the Deed. The assigned properties include but not limited to the following:

1. First Registered Mortgage No. 331660 registered on 17th December 1992 at the Registrar of Titles.
   
2. Second Registered Mortgage No. 37667 registered on 4th May 1993 at the Registrar of Titles.
   

An interim injunction was granted 30th August and the motion was returnable for 17 September to be heard inter partes. On 4 September the defendant Bank filed an inter parte Summons supported by an affidavit sworn by John Grey seeking the dissolution of the said injunction. An affidavit in Reply by Robert Escudier was filed. The hearing of the motion and summons took place on 17 September 2001 and decision was to be given on Notice.

The facts

On 1 June 2001 the parties entered into a Deed and Securities (the ‘deed’) with the plaintiff as the ‘purchaser’ and the defendant as the ‘vendor’ under certain terms and conditions for the purchase price of F$7,250,000.00 payable in two instalments, viz. F$500,000.00 on or before 25 June 2001 and F$6,750,000.00 on or before 1 August.

The sum of F$500,000.00 has already been paid as a deposit. The deed is conditional upon certain ‘Conditions Precedent’ as stated in clause 6.1 thereof. At the time of the hearing all other conditions have been fulfilled except the Reserve Bank approval to complete the transaction.

The plaintiff despite having been given extension of time to settle the matter failed to do so. The defendant is now not prepared to grant any further extension, whereas the plaintiff is pleading to Court to allow further time as Reserve Bank approval is expected very shortly.

The situation in this case is that on the one hand the plaintiff says that it has the money to settle and that it is merely awaiting the approval from the Reserve Bank and is expecting it soon; but there is no indication from any authoritative source that this is the position. The matter has dragged on for sometime and in the Court’s opinion this cannot go on indefinitely with no completion time in sight. On the other hand the defendant says that it has another buyer already and it cannot wait any longer. It says that sufficient time has been given to the plaintiff to finalize the deal and it is not prepared to grant further time. The plaintiff is already in breach of the terms of the Deed.

Consideration of the application

I have considered the affidavits filed herein and the submissions made by both counsel for their respective parties.

It appears to me that the plaintiff has not been fully able to comply with the terms of the Deed and it is already in breach of its terms. There is no concrete evidence from any source to assure that the Reserve Bank approval will be granted. One thing though in favour of the plaintiff is that other consents have been obtained and that a deposit of half a million has been paid. No doubt the plaintiff will not want to lose this deposit and is only awaiting the last of the remaining consents. The question therefore is whether to allow any further time or not to obtain this consent. The plaintiff has also not said whether it is prepared to deposit the balance sum in Court.

As far as the defendant is concerned, it says that it has another purchaser and does not want to lose it. One cannot be too sure whether that is so or not on the affidavit evidence before me. The defendant fears that if there is any further delay it could lose this other purchaser.

On the facts and circumstances of this case, I find that the defendant is justified in seeking the dissolution of the interim injunction. It is well within the Court’s powers to grant the dissolution as stated in the headnote to London City Agency (JCD) Ltd and Another v Lee and Others [(1969) 3 All ER 1376]:

"Court will grant an interlocutory injunction on an ex parte application if a case of sufficient cogency is made, so also will the court on an ex parte application made on sufficiently cogent grounds discharge or vary an injunction granted ex parte."

The principles to be followed in considering the granting of injunctive relief are set out in the leading case of American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; (1975) A.C. 396. There the House of Lords decided that the Court must determine the matter on a balance of convenience and, there being no rule that an applicant must establish a prima facie case. The extent of the court’s duty in considering an interlocutory injunction is to be satisfied that the claim is "not frivolous or vexatious", in other words, "that there is a serious question to be tried".

In Cyanamid (supra) at 406 Lord Diplock stated the object of interlocutory injunction thus:

"... to protect the plaintiff against injury by violation of his right for which 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)

A similar view was expressed by McCarthy P in Northern Drivers Union v Kuwau Island Ferries (1974) 2 NZLR 61 when he said:

"The purpose of an interim injunction is to preserve the status quo until the dispute has been disposed of on a full hearing. That being the position, it is not necessary that the Court should have to find a case which would entitle the applicant to relief in all events: it is quite sufficient if it finds one which shows that there is a substantial question to be investigated and that matters ought to be preserved in status quo until the essential dispute can be finally resolved..." (ibid, 620)

"It is always a matter of discretion, and ... the Court will take into consideration the balance of convenience to the parties and the nature of the injury which the defendant, on the one hand, would suffer if the injunction was granted ... and that which the plaintiff, on the other hand, might sustain if the injunction was refused ..." (ibid, 621).

Here on the affidavit evidence before me I do not find that this is a case where I ought to grant an interlocutory injunction. The plaintiff has not laid the proper basis for its claim on which to have the interim injunction continue. The following passage from Hubbard v Vosper (1972) 2 WLR 389 where Lord Denning at 396 gave some guidance in the principles in granting an injunction, is pertinent:

"In considering whether to grant an interlocutory injunction, 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."

In the outcome, for these reasons applying the principles in the granting of injunction, in all the circumstances of this case particularly bearing in mind the fact that a substantial deposit or part payment has been made and there is likelihood of the last of the approval or consent being forthcoming, I will in the exercise of my discretion grant an interim injunction on condition that the plaintiff deposits the balance sum of F$6,750,000 into Court within 14 days from today. Failure to do so will mean that the interim injunction will stand dissolved. The plaintiff is ordered to pay the sum of $300.00 costs to the defendant within 7 days.

D. Pathik
Judge

At Suva
28 September 2001