Blueshield (Pacific) Insurance Ltd v Fiji Bank Employees Union [2002] FJHC 24; Hbc0312d.1998 (30 August 2002)

IN THE HIGH COURT OF FIJI
(AT SUVA)

CIVIL ACTION NO. HBC 312 OF 1998S

Between:

BLUESHIELD (PACIFIC) INSURANCE LIMITED
Plaintiff

and

FIJI BANK EMPLOYEES UNION
Defendant

Ms. S. Devan for the Plaintiff
R. Naidu for the Defendant

DECISION

On 12 July 2002 in a written decision I gave conditional leave to defend, the condition being the payment into Court forthwith of the sum of $10,000. This is an application for a stay of the payment in pending appeal against my refusal to grant unconditional leave to defend.

Ms. Devan raised the preliminary question whether leave was required to appeal against my order. I am however satisfied that the clear meaning of Section 12 (3) of the Court of Appeal Act (Cap 12) is that the granting of conditional leave is an order refusing unconditional leave and that therefore leave is not required (see also Maganlal Bros v. L.B. Narayan FCA Reps 84/368).

The traditional position was that the Court does not “make a practice of depriving a successful litigant of the fruits of his litigation and locking up funds to which prima facie he is entitled” pending appeal (The Annot Lyle [1886] UKLawRpPro 31; (1886) 11 PD 114) but that the Court must also ensure that “when a party is appealing ..... this court ought to see that the appeal, if successful is not nugatory” (Wilson v. Church (No. 2) [1879] UKLawRpCh 233; (1879) 12 Ch D 454). It followed that “as a general rule the only ground for a stay of execution is an affidavit showing that if the damages and costs were paid there is no reasonable probability of getting them back if the appeal succeeds.” (Atkins v. G.W. Rly (1886) 2 TLR 400).

In the present case, since the condition imposed was payment into court as opposed to payment to the other party it is obvious that the question of nugatoriness does not arise.

In 1992 the English Court of Appeal refined the traditional position. In Linotype – Hell Finance Ltd v. Baker [1993] 1 WLR 321; [1992] 4 All ER 887 the Court explained that where an appellant “can say that without a stay of execution he will be ruined and that he has an appeal which has some prospects of success then that is a legitimate ground for granting a stay of execution.”

It is clear from the context in which this words were used that they must be taken to mean not that the appellant merely has to make the two assertions but that he has to do so to the satisfaction of the Court.

On 7 August 2002 the National Secretary of the Defendant Union, Mr. Dewan Shankar, filed an affidavit in support of this application. After setting out the basis on which he believed that the Defendant has good prospects of successfully appealing against the refusal to grant unconditional leave he stated in paragraph 11:

“the Defendant is not in a position to pay forthwith the sum of ten thousand dollars ($10,000). This financial condition is difficult for the Defendant to fulfil.”

As explained in the reasons for my original Decision it is not sufficient to allege indebtedness without some sort of supporting evidence as a ground for seeking summary Judgment where the debt is denied. It is equally evident to me that it is not sufficient to make an unsupported claim of indigence. It is also worth noting that paragraph 11 of the affidavit, just quoted, is self contradictory. The first sentence asserts that the Union is not in a position to pay. The second sentence states that it would have difficulty in paying.

Out of fairness to Mr. Naidu and Mr. Shankar I granted a short adjournment to enable the Defendant to file further evidence in support of its claim that it would be ruined if a stay was not granted. On 22 August 2002 a second affidavit was filed. This affidavit exhibited a current cheque account statement and a statement of income and expenditure of the Defendant Union for the year ended 31 December 2001.

The current account statement reveals that as at 8 August 2002 the Defendant had a credit balance of $1,411.99. From perusal of the various transactions set out (by far the largest of which is a deposit of $5,000) the clear impression is gained that this account is merely a day to day current expenditure account. Nowhere does Mr. Shankar state that this is the only account held by the Defendant Union.

The income and expenditure statement is also most revealing. The statement shows that the defendant has received not insubstantial amounts by way of interest and dividends, by way of investment income and by way of income from a solidarity fund. Other notable figures are $35,000 spent on “organising and research”, $16,000 on legal fees and $13,000 on solidarity expenses. In the year 2000 almost $17,000 was transferred to “accumulated funds” and $14,000 to the “solidarity fund reserves”. Admittedly, in 2000 the Defendant’s financial situation deteriorated somewhat and it was necessary to withdraw $31,000 from the “accumulated funds” and $6,000 from the “solidarity fund reserve”.

Given the above I am not satisfied that Mr. Shankar has frankly and completely disclosed the Defendant’s true financial position. The statement in paragraph 4 of his second affidavit that the Defendant was not in a position to pay any sum at all into to Court appears to me to be quite clearly incorrect. Mr. Shankar did not even attempt to suggest that the Union would not be able to borrow the amount which it was ordered to pay in to court (see M.V. Yorke Motors (a firm) v. Edwards [1982] 1 WLR 444; [1982] 1 All ER 1024).

The application for a stay fails and is dismissed.

M.D. Scott
Judge

30 August 2002