Attorney-General of Fiji v Castle Properties Ltd [2004] FJHC 50; HBC0529.2004 (22 December 2004)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO.: HBC0529 OF 2004

BETWEEN:

THE ATTORNEY GENERAL OF FIJI
1st Plaintiff

JOHN ERNEST PHILP
2nd Plaintiff

AND:

CASTLE PROPERTIES LIMITED
1st Defendant

JOHN STEWART HILL
2nd Defendant

LAMI TOWN COUNCIL
3rd Defendant

THE ATTORNEY GENERAL
4th Defendant

Counsel: 1st Plaintiff - excused
Mr. C. Cameron - for 2nd Plaintiff
Ms Marie Chan – for 1st & 2nd Defendant
Mr. Calvin Ziru - for 3rd Defendant
4th Defendant – excused

Hearing: 17th & 20th December, 2004
Judgement: 22nd December, 2004

JUDGMENT

Background:

The 2nd plaintiff purchased a life style block in the exclusive Uduya Point Sub-Division. That development is owned and operated by the first defendant company. The second defendant is the principal director and shareholder of the first defendant.

The applicant wants to restrain the first defendant from completing a multi-unit residential apartment on land it owns in the sub-division. He also seeks to prevent the first defendant from reclaiming, subdividing, developing or in other ways dealing with the foreshore and seabed directly in front of the subdivision at Uduya Point. He has filed a comprehensive writ and seeks to injunct the 1st and 2nd defendants pending a hearing of the substantive claim.

The Application

The applicant claims that the first and second defendants induced him into the purchase by false and misleading representations made about this exclusive subdivision.

He claims that the first and second defendants together with a Malcolm Brain, another Director of the 1st Defendant Company, falsely represented:

a. The said land was for single dwelling residential units.

b. The said land was an up-scale, up-market residential development.

c. The largest development on the said land would be an oversized house with rooms rented out.

d. The lots in the said land will not be amalgamated.

e. That the relevant residential building scheme covenants in the sales brochure and Sale and Purchase Agreement would be annexed to all land in the subdivision.

f. That certain residential building scheme covenants would be annexed to the land and protect the quality and value of the subdivision and the residents enjoyment thereto.

g. That the said land would be an exclusive community for the residents of Uduya Point.

h. That the said land would have unobstructed views of the harbour.

i. That there would only be the Uduya Point subdivision and not any further development in front of Uduya Point as a 2nd stage to the 1st and 2nd defendants plans.

j. That the said subdivision would be exclusive to the residents at Uduya Point, excluding the public and certainly any residents and businesses of any 2nd stage development by the 1st and 2nd defendants.

It is claimed that these misrepresentations are made not only in respect of the applicants contractual rights but also and specifically against the provisions of the Fair Trading Decree 1992. Counsel emphasizes section 58 of the Act which provides:

“58. False representation and other misleading or offensive conduct in relation to land

(1) A person shall not, in trade or commerce, in connexion with the sale or grant, or the possible sale or grant, of an interest in land or in connexion with the promotion by any means of the sale or grant of an interest in land - ......

(b) make a false or misleading representation concerning the nature of the interest in the land, the price payable for the land, the location of the land, the characteristics of the land, the use to which the land is capable of being put or may lawfully be put or the existence or availability of facilities associated with the land; or.....”

Under the Act, Companies and Directors are made specifically liable for misrepresentations. The Act provides a statutory right of injunction in addition to the Courts equitable powers to grant temporary relief. Section 125 of the Decree provides:

125. Injunctions

(1) An injunction under this section may be granted by the Court –

(a) against a person in the course of proceedings against that person for an offence against this Decree; or

(b) at any other time.

(2) If the Court is satisfied, on the application of the Minister, the Director or any other person that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute –

(a) a contravention of a provision of this Decree;

(b) attempting to contravene such a provision;

(c) aiding, abetting, counselling or procuring a person to contravene such a provision;

(d) inducing or attempting to induce, whether by threats, promises of otherwise, a person to contravene such a provision;

(e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provisions;

(f) conspiring with other to contravene such a provision,

the Court may grant an injunction in such terms as the Court determines to be appropriate.

The applicant relies on the three affidavits filed. In effect he says he has a prima facie case. It is not frivolous or vexatious. These are serious questions to be tried. The balance of convenience favours the granting of an injunction at least over the Christmas period to stop the developer trampling on the applicant’s rights as a landowner.

The applicant argues that he would not be adequately compensated by an award of damages and will suffer irreparable harm if the first defendant is allowed to continue.

He submits that he could never be compensated for his frustrated expectations in the purchase. These include a right to join an exclusive gated and secure community, comprised of permanent high quality private residences, occupied by permanent residents not of a transient nature as might use the first plaintiff’s multi-residential apartments. He says in respect of lifestyle that the proposed development is too dense and will detract from the amenity of the area in terms of visual aspect and intensity of use creating inevitable environmental effects that will ruin his chosen lifestyle. In addition he is concerned at the prospect of his “beach front” property being further removed from its seaside position by a proposed reclamation and development of foreshore and seabed that is effectively now the subdivisions beach and waterfront.

The applicant says that unless the developer is stopped now the Courts will be powerless to grant the necessary orders and force the developer to undo anything he may have done that is subsequently held to be unlawful. Counsel submits that once the multi-residential apartment is built or rights given for reclamation the project will have unstoppable momentum. Demolishing all or part of the multi unit residential development or removing any reclaimed area will not be a viable option.

In effect he seeks a ‘quia timet’ injunction to stop anticipated harm to his rights. There are conflicts in evidence over the pre-contractual representations made to entice the applicant into the purchase.

The Opposition

The first defendant denies that there any such representations as pleaded. In reliance on “caveat emptor” counsel points out that the provisions in the sales brochure and agreement for Sale and Purchase made it clear that the entire subject land was zoned Residential ‘B’. This zone permits as of right multi-unit development. Counsel further submits that any reclamation of foreshore and seabed is at present only a proposal. Accordingly counsel submits there is no proper cause of action or proper reason to grant temporary relief.

In any event even if the Court found there was a serious question to be tried counsel for the first defendant submits that damages would be an adequate remedy for contractual misrepresentation or breach of the Fair Trading Decree. Her client is substantial and well able to meet any claim that may succeed.

It is further argued that these proceedings being a potential “dealing” in land require the prior consent of the Minister of Lands. This has not been obtained.

Finally counsel submits that in any event the balance of convenience favours her client. The developer is substantial and well able to pay compensation and damages not only to this applicant plaintiff but also any other landowner that cares to bring actions to enforce their rights. It is claimed that a stop work order now would effectively deny the 15 employees on the site their employment and opportunity for a Christmas bonus.

Decision

Although this application is primarily brought under the Fair Trading Decree the usual principles for granting an injunction apply. In order to determine this matter the applicant must satisfy me that his claim is neither frivolous nor vexatious, in other words does the evidence before the Court disclose a serious question to be tried. I am not required to resolve factual conflicts for the purposes of an interim injunction application. Indeed it would be inappropriate that I do so.

It is not a part of the Court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavits as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which will call for detailed argument and mature consideration. Regard must be had to the evidence as a whole not merely the evidence for the plaintiff’s and not merely the evidence for the defendants. Ultimately the issue is where does the overall justice lie.

I am satisfied that the applicant’s case is not frivolous or vexatious and that there are serious questions to be tried. The promotional material for the sub-division was aimed at enticing substantial investors into an exclusive enclave of private residences along a pristine waterfront setting. These representations were made to convince the prospective purchaser that his investment was not only sound but exclusive. The modern terminology is “lifestyle” purchasing.

This indicates that the value in the property purchased goes well beyond the dollar figure paid for the land and enters into realms beyond mere monetary value. Money cannot compensate feelings of security, exclusivity, reliability, dignity of lifestyle, permanence, attractiveness of location and the shared snob value of living where others cant. Dollars are cold comfort for such frustrated expectation.

The heart, not the head, often drives such a purchase. The frustrated expectation of a lack lustre subdivision ruined by a shonky developer can rarely be fully compensated in dollar value. However, that is not the issue. The test is whether or not damages would be an ‘adequate’ remedy. Adequacy does not equate to full compensation. I am satisfied that this applicant will find adequate remedies in damages.

Further, the applicant and his co-purchasers are mostly significant business people with a mature and intelligent outlook on life. It is therefore remarkable that they and their legal advisers chose to ignore the clear warnings contained in the promotional material and sales and purchase agreement concerning the subject land. Despite any representations made to the contrary it is clear that the developer or indeed any other person has always been able to develop otherwise compliant multi-unit residential developments on any lot in the subdivision as of right. Both the promotional brochure and the sales and purchase agreement refer to the land area being zoned ‘Residential B’.

There may have been representations made by the developer that it would not go as far as is now proposed. But the purchasers never secured these representations by restrictive covenants. These are issues that should be fully explored by evidence at a complete and substantive hearing.

I am not convinced that the developer’s thoughts about the foreshore have proceeded much beyond planning and as such I am not satisfied that the time has come to issue a ‘quia timet’ injunction. In this regard the applicant has failed to establish the probability of a future breach and imminent damage. Such a remedy is only granted in circumstances where there is a strong probability of grave harm in the immediate future for which damages would not be adequate.

I accept that the developer has substantial assets from which to pay damages. Further I note his undertaking to undo any unlawful works by demolition if necessary should that be ordered. The balance of convenience favours the developer and his right to proceed with the project as advertised and contracted for. Finally, the applicant's case must fail because he did not adequately and in a timely fashion make his undertaking as to damages. This undertaking was not part of the original documents. It was not filed with pre-hearing papers. It was filed late and without regard to my order that it would remain effective only if the defendant accepted its contents. Regrettably the undertaking affidavit was not satisfactory. The applicant is of substantial means but on the material before me he could never afford to meet a total damages claim by a successful developer.

In summary there are serious questions to be tried. However, damages would be an adequate remedy. Further on this evidence, the balance of convenience favours the developer. The time for a ‘quia timet’ injunction on the foreshore issue has not yet been reached. Finally, the applicant’s undertaking as to damages is not satisfactory.

Conclusion

For these reasons I refuse the application. I release the first and second defendants from their undertaking to stop work on the subject site.

The matter does require an urgent hearing. My fixture commitments prevent that from happening until October of next year and accordingly I am asking this file be reassigned to another High Court Judge to progress the matter to a conclusion.

Costs are reserved in the cause.

Gerard Winter
JUDGE

At Suva
22nd December, 2004