Ocean Holdings Ltd v Olympic (Fiji) Ltd [2004] FJHC 427; HBC0245 & 024.2002L (11 June 2004)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0245 OF 2002L

BETWEEN:

OCEAN HOLDINGS LIMITED
Plaintiff

AND:

OLYMPIC (FIJI) LIMITED
1st Defendant

AND:

RICK VETAIA SADRANU aka RICK HOLLAND and DEBROAH SADRANU
2nd Defendants

_____________________

CONSOLIDATED WITH ACTION NO. HBC0247 OF 2002L

BETWEEN:

OLYMPIC (FIJI) LIMITED
Plaintiff

AND:

OCEAN HOLDINGS LIMITED
1st Defendant

AND:

GARRY PERVAN
2nd Defendant

Counsel: Mr. C.B. Young for Oceans Holdings Limited & Mr. Pervan
Mr. S.K. Ram for the Olympic (Fiji) Limited & Mr. Sadranu

Date of Hearing: 03 June 2004
Date of Judgment: 11 June 2004

JUDGMENT

Applications

These matters come before the court by way of a Summons filed on behalf of Ocean Holdings Limited and Garry Pervan [“Ocean”] which seeks: -

1. That the status quo order made pursuant to the Court’s Ruling of 28 October 2002 be dissolved;
   
2. That Olympic (Fiji) Limited, Rick Vetaia Sadranu also known as Rick Holland and Debroah Sadranu whether by their servants or agents or otherwise be restrained from interfering with Ocean Holdings Limited’s right to re-possess the vessel “Tamasua Explorer”.
   

There is also before the court a Summons filed on behalf of Olympic (Fiji) Limited and Rick Vetaia Sadranu and Debroah Sadranu [“Olympic”] which summons seeks 9 Orders including an order for costs which Orders include an order that Ocean repair the Tamasua Explorer [“the vessel”] and that they be restrained from removing the vessel from the jurisdiction of the court. In addition, the Summons seeks that Ocean provide security for costs in the sum of Forty Five Thousand Dollars ($45,000.00) and in the alternative to the above orders that the vessel be placed on dry dock at the cost of Ocean until the determination of the proceedings and that there be an order for a speedy trial.

Background

The proceedings arise from a Demise Charter Agreement between the respective parties. This Agreement, an issues arising pursuant to it were subject of a judgment of Mr. Justice Byrne on the 28^th of October 2002. His Lordship made orders: -

1. That the injunction granted to Ocean Holdings Limited on the 13^th August 2002 be dissolved;
   

ii. The status quo is to be maintained until further order;

3. Public Liability Insurance is to be obtained on the vessel “Tamasua Explorer”;
   
4. The proceeds from the tours are to be deposited into the trust account of either parties’ solicitors or into a separate account until both parties being joined signatories.
   

The matter again came before Mr. Justice Byrne who on the 6^th of June 2003 delivered a judgment, dismissing the plaintiff’s summons dated 7 November 2002 which summons sought to clarity orders that the Charter Agreement was terminated by notice given under Clause 31 of that Agreement. His Lordship awarded the defendant costs. That judgment has been appealed by Ocean and is listed for hearing before the Fiji Court of Appeal on 6^th July 2004.

The vessel is currently moored at Walu Bay, Suva. The vessel is not capable of being operated and much of its equipment appears, from the evidence of Garry Pervan to have been removed. Concern is expressed on behalf of Ocean that the vessel may sink as the engines are not operational and the bilge pumps have been removed. Garry Pervan gives evidence that he attended the vessel on 20 May 2004 and that he engaged labourers to remove water from the hulls by bucket, an operation that took in excess of 6 hours.

A report has been prepared by Billet Wright & Associates Limited, which report details, the works required to be carried out to the vessel.

It would appear that the dispute is as to who is responsible for the repairs with the issue apparently being as to whether they are due to normal wear and tear or whether they are due to neglect or lack of maintenance. If the former, it is argued then the repairs are the responsibility of Ocean but if the latter then the repairs are the responsibility of Olympic.

Olympic says that it has in fact spent a large amount of money in carrying out essential repairs to the vessel. It would seem however that notwithstanding this expenditure, the vessel has been unable to operate since at least December 2003.

There does not appear to be any issue that the vessel currently has no form of insurance effected with respect to it. It is argued on behalf of Olympic that insurance, pursuant to the prior orders of the court, was only required when the vessel was operating and as it is no longer able to be operated, Olympic is therefore not required, pursuant to those orders, to effect insurance.

Ocean, however, argues that the Agreement requires Olympic to insure the vessel and its failure to do so is in fact a breach of the Agreement. This, of course, is subject to the Agreement still being on foot notwithstanding the earlier orders of the court.

The Issue

The dominant issues so far as the court is concerned, appear to be the need to preserve the vessel pending the outcome of the litigation. The previous order of Mr. Justice Byrne in October 2002 appears to have been intended to enable the business venture to continue to function pending the outcome of the litigation.

The situation is now somewhat different in that the vessel is inoperative and requires expenditure estimated by Ocean, to be in the order of Two Hundred Thousand Dollars ($200,000.00), to enable the vessel to be repaired to a state that would make it capable of operation.

There would appear to be no conflict with the orders of the 28^th of October 2002, if the court were to make some further order that merely preserves the asset, that is the vessel, awaiting the finalization of the litigation.

It would however seem to be inappropriate for the court to embark on any consideration as to the standing of the Demise Charter Agreement when the status of that document has been considered by Mr. Justice Byrne in his earlier ruling and is the subject of appeal to the Fiji Court of Appeal.

It is argued that the vessel can only be properly secured if it is lifted to a dry dock or alternatively if all necessary repairs are carried out. It is further argued that there are no dry docking facilities in Suva and it would be necessary for the vessel to be towed to Vuda Point to be dry docked.

It is submitted on behalf of Olympic that the court is precluded from considering Ocean’s Summons as it seeks to overrule and/or alter and/or review the decision of Mr. Justice Byrne.

As I have indicated, I am of the opinion that to make orders that do no more than preserve the vessel pending the outcome of the litigation is not or would not be an order that would overrule, alter or review the decision of His Lordship but would be consistent with it and in any event, I note that the ruling of the 28^th of October 2002 was made “until further order of the court”.

Conclusion

For reasons that I have stated earlier, I am of the opinion that it is essential that the vessel be maintained pending an outcome of the litigation. As the vessel is not able to be operated, it seems appropriate that it be maintained at the cost of both parties, that is both Ocean and Olympic but that the cost of maintaining the vessel should be adjusted ultimately dependent upon the outcome of the litigation.

Whether it is necessary for the vessel to be placed in dry dock and if so whether it is necessary for it to be moved from Suva Harbour to Vuda Point, are matters to be determined by the parties as there is insufficient evidence before me to make a determination in that regard.

Whilst it is extremely difficult to ensure that any matter receives a speedy trial at this court, I propose that orders be made for this matter to be placed before the Deputy Registrar to obtain an early trial date, immediately following the determination by the Court of Appeal.

I strongly urge the parties to consider their respective positions, whilst awaiting a hearing date of the substantive matter. The matter is one that should, in the interest of the parties, be resolved at an early date, as any delayed litigated outcome would appear to me to result in a loss for both parties.

Orders of the Court

1. That the vessel be preserved in a safe place pending the outcome of the litigation.
   
2. That the responsibility for the preservation of the vessel and the cost thereof is to be met, initially, equally by Ocean and Olympic.
   
3. The ultimate cost for the responsibility of preservation of the vessel from the date of this Orders to the finalization of the litigation, is to be determined in the substantive matter.
   

4. Costs of these Summonses to be costs in the cause.

JOHN CONNORS
JUDGE

AT LAUTOKA
11 JUNE 2004