Mohammed Mukhtar Khan and Company Ltd v Naiyalayala Forest Development Company Ltd [2005] FJHC 271; HBC0300.2004L (12 January 2005)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0300 OF 2004L

BETWEEN:

MOHAMMED MUKHTAR KHAN & COMPANY LIMITED
Plaintiff

AND:

NAIYALAYALA FOREST DEVELOPMENT COMPANY LIMITED
1st Defendant

AND:

MERCHANT BANK OF FIJI LIMITED
2nd Defendant

Counsel for the Plaintiff: Mr. A. Patel
Counsel for the 1st Defendant: Mr. K. Qoro
Counsel for the 2nd Defendant: Mr. J. Sharma

Date of Hearing: 12 January 2005
Date of Judgment: 19 January 2005

JUDGMENT

This matter comes before the court by way of Notice of Motion filed on the 4^th October 2004 wherein the plaintiff seeks an order restraining the 2^nd defendant from seizing Hitachi EX 150 Excavator Registered No. DS 781.

The matter was heard on the 12^th January 2005 and on that day, orders were made dismissing the motion and ordering that the costs be the 2^nd defendant’s costs in the cause. At that time, I indicated I would publish my reasons and I now do so.

Background

The 2^nd defendant is a financial institution of which the 1^st defendant was a customer. On or about the 23^rd April 2001, the 1^st defendant entered into a bill of sale with the 2^nd defendant to facilitate an advance of monies to enable the purchase by the 1^st defendant of the Hitachi EX 150 Excavator registered no. DS 781.

Apparently without reference to the 2^nd defendant, the 1^st defendant on or about the 30^th March 2001 sold the excavator to the plaintiff for the sum of $36,000.00 and on the 20^th May 2004, the Land Transport Authority transferred the excavator into the name of the plaintiff. Subsequent thereto on or about the 22^nd May 2004, a bailiff acting on behalf of the 2^nd defendant seized the excavator from the plaintiff’s premises. The seizure was made pursuant to the bill of sale of which it is alleged that the plaintiff had no knowledge at the time of the purchase.

Subsequent to the seizure, negotiations took place between the plaintiff and the 2^nd defendant which resulted in the excavator being released by the 2^nd defendant to the plaintiff on the 15^th June 2004.

The excavator is used by the plaintiff in connection with the logging contract it has with Fiji Hardwood Corporation Limited.

In September 2004, further threats of seizure were made by the 2^nd defendant against the plaintiff and it was these threats that led to the commencement of these proceedings by the filing of the Notice of Motion on the 4^th October 2004.

The plaintiff sought that the motion be dealt with ex-parte which the court declined and the 2^nd defendant then immediately effected a seizure of the excavator which has remained in the possession of the 2^nd defendant since that time.

Counsel submits that it is intended that the 2^nd defendant auction the excavator on Thursday, 13^th January 2005 pursuant to the terms of the bill of sale.

The Law

The principles expressed by Lord Diplock in American Cyanamid v Ethicon Ltd [1975] UKHL 1; [1975] A.C. 396 need to be considered. These principles are:

(a) Is there a serious question to be tried?

(b) Are damages an adequate remedy?

(c) If not, where does the balance of convenience lie?

The plaintiff argues that the bill of sale was not registered and is therefore unenforceable.

However the provisions of section 98 of the Companies Act would appear to satisfy this requirement, in that it provides for the registration by companies of mortgages and charges specifically affecting the property of companies. This issue was considered by Mr. Justice Pathik in Merchant Finance & Company Limited v Bahadur Ali & Ors – Civil Action No. 63 of 2003S.

In any event it would seem that there is a serious issue to be tried in due course.

There is nothing before the court to suggest that damages would not in the circumstances of this matter be an adequate remedy. The plaintiff has been deprived of the use of excavator since the time of its seizure in October 2004. Any loss of production as a result of the inability to use the machine would appear to be capable of being remedied by way of an award of damages. Similarly, any loss of opportunity that may have occurred would also be capable of being remedied by way of damages. There is no need to consider where the balance of convenience lies having determined that damages would in fact be an adequate remedy.

The relief sought in the Notice of Motion is the restraint of the 2^nd defendant from seizing the excavator. As it is apparent from what I have said above the excavator has in fact been seized and accordingly, even if the relief sought were granted, it would be of no effect.

Orders

1. The plaintiff’s motion filed on the 4^th October 2004 is dismissed.
   
2. The costs of the motion are to be the 2^nd defendant’s costs in the cause.
   

JOHN CONNORS
JUDGE

At Lautoka
12 January 2005