Ba Town Council v Ghim Li Fashion (Fiji) Ltd [2005] FJHC 274; HBC0222.2005 (2 December 2005)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0222 OF 2005L

BETWEEN:

BA TOWN COUNCIL
Plaintiff

AND:

GHIM LI FASHION (FIJI) LIMITED
Defendant

Mr. A.K. Narayan with Mr. A. Sudhakar for the plaintiff
Mr. I. Fa for the defendant

Date of Hearing: 21 November 2005
Date of Ruling: 2 December 2005

RULING

The plaintiff by Ex-parte Summons filed on the 16^th August 2005 seeks a mareva injunction with respect to the whole of the land in Crown Lease No. 13444, Certificate of Title No. 12777 and Certificate of Title No. 12670.

On the 12^th August 2005 orders were made ex-parte restraining the defendant from dealing with the 3 parcels of land together with an injunction restraining the defendant from a moving monies or assets out of Fiji, and ordering the defendant within 7 days of that date to disclose by way of affidavit full details of all bank account for any bank in Fiji and to disclose by way of affidavit full details of all assets and other property both real and personal and/or that in any event that any sale had already taken place the proceeds be deposit with the Court. That Ex-parte Summons is before the Court for inter-partes hearing.

Also before the Court is a Summons filed on behalf of the defendant on the 12^th October 2005 wherein the defendant seek an order that the Ex-parte Orders of the 12^th August 2005 be set aside forthwith.

The plaintiff relies upon an affidavit of Praveen Bala filed on the 12^th August 2005 and the 17^th November 2005.

The defendant relies upon an affidavit of Nick Zhang sworn on the 7^th November 2005.

Counsel for both parties filed written submissions and I have had the benefit of further oral submissions.

By letter dated 20^th January 2004, the plaintiff by its mayor, Praveen Bala, wrote to the defendant referring to a conversation with “Mr. Simon” of that day and informing the defendant that the plaintiff was willing to offer a building size “120m x 27m and the rental shall be $17,500.00 per month”.

By letter dated 20^th January 2004, Simon Tay as country director/general manager of the defendant (Ghimli Fashions (Fiji) Ltd) wrote to the plaintiff via its mayor and said:

“We are glad to accept your proposal to lease the building of the size 120mts x 27mts and the rental shall be $17,500 (VIP) per month.”

These letters were preceded by letter dated the 6^th January 2004 where the plaintiff was offering to the defendant a building size 78mts x 27mts at a rental of $12,000.00 per month.

It is the plaintiff contention that the building was increased in size to meet the specifications of the defendant. The rent was accordingly increased as well.

Following the correspondence referred to the plaintiff constructed the building at an increased cost of $450,000.00 to accord with the required specifications of the defendant. The building was completed on the 31^st August 2004.

By paragraph 6 of the affidavit of Praveen Bala of the 12^th August 2005, it is stated:

“That after the agreement had been reached I did try to have all the terms noted on a further written agreement a draft of which I gave to the Defendant’s employee, Mr. Simon Tay...The term of three years with a right of renewal was agreed between Mr. Tay of the Defendant company and myself on behalf of the plaintiff.”

The defendant company having lost its tax free status ceased trading on the 1^st April 2004 and its associated companies have now ceased operation in Fiji.

There is no affidavit evidence from Mr. Simon Tay as to the terms of the agreement or of the discussions had with Mr. Bala. The only evidence on behalf of the defendant is an affidavit by Mr. Zhang, the “Station Manager of Ghimli Apparel Limited”, a company which is not a party to these proceedings and nor is it the registered proprietor of the land sought to be the subject of the mareva injunction.

It is submitted on behalf of the defendant that the pre-requisites for the formation of a contract as set forth in Fletcher Challenge Energy Limited v Electricity Corporation of New Zealand Ltd [2002] 2 NZLR 435 are not present in this matter. Those pre-requisites might be summarized as:

“a) An intention to be immediately bound (at the point when the bargain is said to have been agreed); and

(b) An agreement, express or found by implication, or the means of achieving an agreement (eg an arbitration clause), on every term which:

(i) was legally essential to the formation of such a bargain; or

(ii) was regarded by the parties themselves as essential to their particular bargain.”

From the exchange of letters it would appear that the premises were agreed, the rent was agreed and paragraph 6 of Mr. Bala’s affidavit confirms that the term was also agreed.

The plaintiff submits that there is sufficient compliance with the requirements of the Guarantee and Bailment Act (Section 59 (d)) by virtue of the exchange of letters referred to above.

The defendant further submits that in any event the defendant is estopped from denying the existence of the existence of an agreement to lease by its conduct.

In Waltons Stores (Interstate) Ltd v Maher (1987 – 1988) 164 CLR 387 Brennan J. said at p. 428:

“In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that:

(1) The plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship will exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationships;

(2) The defendant has induced the plaintiff to adopt that assumption or expectation;

(3) The plaintiff acts or abstains from acting in reliance on the assumption or expectation;

(4) The defendant knew or intended him to do so;

(5) The plaintiff’s action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and

(6) The defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.”

The facts of Walton Stores are not dissimilar from the facts of the present case.

His Lordship went on at page 429 to say:

“For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant’s property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff’s reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs.”

The fundamental terms of the proposed contract appeared to have been agreed between the parties and a draft contract submitted for approval and execution by the defendant.

Counsel for the Plaintiff further submits that there has been part performance of a contract. In that the plaintiff proceeded to construct the building in accordance with the specifications required by the defendant.

It is said that although questions of practice and procedure in regard to mareva injunctions cannot be regarded as settled at the following general rules apply.

(1) The plaintiff must show a sufficient probability that he will obtain judgment and a sufficient risk that if a mareva injunction is not granted that judgment would be rendered wholly or party ineffective – Third Chandras Shipping Corporation v Unimarine S.A. [1979] Q.B. 645.

(2) The Court must consider the various probabilities and risks, as well as such considerations as like the hardship or prejudice to those who may be affected if an injunction is granted and make the order that is most just in all the circumstances – C.B.S. United Kingdom Ltd v Lambert [1983] Ch. 37.

(3) A “good arguable case” is the minimum which the plaintiff must show in order to cross what might be rightly be described as the “threshold for the exercise of the grant of a mareva injunction. The Court must consider evidence as a whole and deciding whether or not to exercise the jurisdiction – Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft m.b.H und co KG [1983] 1 WLR 1412.

(4) The plaintiff should be able to show a greater probability that he will obtain judgment and that an execution will be frustrated unless the injunction is granted – Third Chandras Shipping Corporation v Unimarine S.A.

(5) The plaintiff may, in addition to the usual undertaking as to damages be required to give further undertakings to the extent that are appropriate to avoid or minimize prejudice to the defendant or third parties – Third Chandris Shipping Corporation v Unimarine S.A.

The orders made by the Court on the 12^th August 2005 required the defendant to disclose by way of affidavit full details of all bank accounts with any bank in Fiji. The defendant has failed to comply with this order but have sought to have all orders made on that day set aside. The failure of the defendant to furnish information as to assets and bank accounts in this country lends further support to the plaintiff’s application.

It is clear from the evidence that the defendant has ceased its operations in this country and is in the process of disposing of its assets. Should no injunctive relief be granted, it appears more likely than not, that in the event of the plaintiff being successful in its substantive claim that there would be no assets to meet such judgment.

On behalf of the plaintiff, it is submitted in the affidavit of Praveen Bala filed on the 17^th November 2005 that alternative to the earlier order sought, the plaintiff seeks orders that allow the sale of the parcels of land to proceed upon the basis that the proceeds of sale are paid into Court.

I am satisfied that the plaintiff has met the requirements detailed above and is therefore entitled to the injunctive relief it seeks.

The Orders of the Court therefore are:

1. The defendant by its servants, agents or otherwise is restrained from selling, transferring, assigning, charging, mortgaging, encumbering or otherwise alienating or dealing with: -
   

(i) Crown Lease No. 13444 situated at Nadi, Fiji more particularly described as “Waqadra Industrial Subdivision” on Deposited Plan 3129 containing an area of 2631 sqm.

(ii) Certificate of Title No. 12777 situated at Lautoka, Fiji, more particularly described as “Vitogo” and “Drasa” (part of) on Deposited Plan 3219 containing an area of thirty-two perches and eight tenths of a perch.

(iii) Certificate of Title No. 12670 situated at Lautoka, Fiji more fully described as “Vitogo” and “Drasa” (part of) on Deposited Plan 3219 containing an area of thirty-five perches and three tenths of a perch.

(2) The defendant within 7 days disclose by way of affidavit full details of all bank accounts with any bank in Fiji.

(3) The defendant be at liberty to apply on 7 days notice for a variation of these orders to facilitate the sale of any of the parcels of real estate subject to the proceeds of sale being paid into Court.

(4) The Defendants’ Summons of the 12^th October 2005 is dismissed.

(5) The defendant to pay the plaintiff’s costs as assessed or agreed.

JOHN CONNORS
JUDGE

At Lautoka
2 December 2005