Naqa v Fiji Electricity Authority [2005] FJHC 377; HBC0237.2002 (2 December 2005)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO.: HBC0237 OF 2002

BETWEEN:

RATU SOLOMONE NAQA & OTHERS
Plaintiff

AND:

THE FIJI ELECTRICITY AUTHORITY
Defendant

Counsel: Mr. I. Fa – for Plaintiff
Mr. Barnes – for Defendant

Date of Hearing & Ruling: 2nd December, 2005

RULING ON STAY

The background to these proceedings was summarized in my judgment of the 31^st of October, 2005. The defendant has exercised its right and filed an appeal this week, just inside the time limit.

They have made this application for stay.

The principles for stay are well established. In Atul Kumar Ambalal Patel vs Krishna Murti (reported) Civil Action HBC0225.99L, 8^th March 2000 a ruling on stay, my brother Justice Gates said:

“Once successful, the litigant should not lightly be deprived to the fruits for successful litigation ....the power of the court to grant a stay is discretionary.....and it is an unfettered discretion....the applicant must show that special circumstances exist as to why a stay should now be imposed and the successful litigant in effect held back from his remedy.”

In essence the principles are:

1. A successful litigant should not rightly be deprived of the fruits of his litigation.
2. The power to grant a stay is discretionary.
3. The power is unfettered.
4. The applicant needs to show special circumstances.
   

In respect of these special circumstances Justice Dawson observed in Federal Commissioner of Taxation vs Myer Emporium Ltd (No. 1) [1986] HCA 13; [1986] 160 CLR 220, at page 222-3:

“It is well established by authority that the discretion which it confers to order a stay of proceedings is only to be exercised where special circumstances exist which justify departure from the ordinary rule that a successful litigant is entitled to the fruits of his litigation pending the determination of any appeal: see e.g. The Annot Lyle [1886] UKLawRpPro 31; [1886] 11 P.D. 114, at p.116; Scarborough v. Lew’s Junction Stores Pty Ltd. [1963] VicRp 20; [1963] V.R. 129, at p.130. Special circumstances justifying a stay will exist where it is necessary to prevent the appeal, if successful, from being nugatory: see Wilson v Church (No. 2) [1879] UKLawRpCh 233; [1879] 12 Ch.D. 454, at p.458; Klinker Knitting Mills Pty Ltd. v L’Union Fire Accident and General Insurance Co. Ltd. [1937] VicLawRp 12; [1937] V.L.R. 142. Generally that will occur when, because of the respondent’s financial state, there is no reasonable prospect of recovering moneys paid pursuant to the judgment at first instance. However, special circumstances are not limited to that situation and will, I think, exist where for whatever reason, there is a real risk that it will not be possible for a successful appellant to be restored substantially to his former position if the judgment against him is executed: see McBride v Sandland (No. 2) [1918] HCA 59; [1918] 25 C.L.R. 369, at p.375.” (emphasis mine)

The applicant has paid the full sum of $9,428,170.00 into court. In that respect the money awarded to the plaintiff in my judgment has been protected.

The applicant claims that the complicated nature of the ruling, the public importance of the case and the fact that there is no prospect of the recovery of any monies paid in combination justify a stay particularly where the judgment sum has been secured for the benefit of the plaintiff. I accept that submission.

The applicant is concerned that if any of the judgment money is dispersed to the plaintiffs trusts then it will be difficult if not impossible to recover it in the event that their case on appeal is successful. The affidavit in support starkly stated that belief with little factual information to support it. However, in my view, I am entitled to consider the evidence taken in the trial that the plaintiffs were in very poor circumstances and of very modest means. I accordingly accept from that evidence there is a fair inference that any money paid to these impoverished folk is likely to be used up in pressing family needs and will not be easily recoverable if the defendant is successful on appeal.

This would render the appeal rights nugatory. In those circumstances it is the duty of the court to make a stay order. This special circumstance is a powerful one but requires me to consider whether the appeal is bona fide and whether there are other balancing features that might outweigh this consideration (Wilson v Church, No. 2 [1879] UKLawRpCh 233; [1879] 12 Ch.D. 454).

The Appeal

In Peter Elsworth and Parkanson Pty.Ltd. vs Yanuca Island, HBC0157.97L, my brother Justice Gates observed and I agree that a detailed enquiry into the grounds is not required. The assessment called for is whether or not there is some prospect of success as opposed to whether the entire appeal itself is obviously destined to fail or made merely for purposes of delay (Elsworth page 5).

The grounds of the appeal are detailed in the second annexure to the affidavit in support by the Chief Executive Officer of the defendant Fiji Electricity Authority dated 30^th of November, 2005.

I find that Ground 1 going as it does to the heart of the decision is at least arguable.

I do not apprehend the force of the argument detailed in Grounds 2,3,4 and 5. The judgment runs the principles described in the Fletcher Challenge Energy Ltd. a decision alongside the case facts. As such Fletcher was followed rather than distinguished. In the judgment I expressed, however, a caution over the bold acceptance of the Fletcher case into Fiji jurisprudence, and relational contracts in particular.

Grounds 3 and 4 concerning my determination on principles of good faith while of jurisprudential interest merely add weight to the primary decision and were independent findings. Accordingly a successful appeal on those grounds may not provide the appellants with the result they seek in the Court of Appeal.

Concerning Ground 5 I do not accept that it is wrong to use the Constitution to assist in the determination of contract formation. However, I note that Ground 5 is really divided into two parts and should perhaps be separated out between 5(A) relating to a criticism of my use of the constitutional provisions to assist in determination of contractual obligations and quite separately a ground that in any event I applied the wrong test in determining whether in fact a contract had been formed. Again this sub-ground going to the heart of the decision might at least be arguable.

As for Grounds 6 and 7 they are criticisms on appeal of matters of judgment and as such are arguable on appeal.

Ground 8 is not, in my view, sustainable as the documentary trail was clear about Board and Cabinet ratification.

Accordingly, I find that Grounds 1,5(B), 6 and 7 do satisfy the requisite test that the appellant at the very least has an arguable appeal. The grounds and counsels submissions emphasized the important policy concerns behind the appeal. Accordingly, I find the appeal appears genuine as opposed to tactical and filed only for delay purposes.

Balance of Convenience

Sir Moti Tikaram considered the balance of convenience aspect of a stay application in Reddy’s Enterprises Ltd v The Governor of the Reserve Bank of Fiji, FCA [1991] where at page 87 his Lordship said:

“The test here is a determination of which of the two parties will suffer greater harm from granting or refusal of an interim stay pending a determination of their appeal on the merits.”

As such his Lordship was echoing the comments of the English House of Lords in Roger v Comptoir D’Escompte De Paris [1871] LR 3 PC at 475 where it was observed that one of the first and highest duties of all courts is to take care that any act of the court does no injury to any of the suitors.

In response learned counsel for the plaintiffs emphasized the classic principle that the successful plaintiffs were entitled to the fruits of their litigation.

Counsel adopted the decision of my learned brother Justice Gates in Elsworth (supra) and submitted that the grounds of appeal were not strong criticizing their lack of particularization. However, as I have earlier observed the grounds that go to the heart of the decision do provide sufficient to cross the threshold test of mere arguability.

In relation to the argument that any money paid out will be impossible to recover and thereby render the appeal nugatory counsel offers the timber on the land is a valuable asset against which the appellant if successful could reclaim any monies paid out. He points to the evidence of Mr. Donlon concerning the considerable value of the timber on the land.

While that may be so it would, in my view, require a most complicated process to recover money by cutting and selling timber from these Monasavu Highlands.

I remind myself that the burden is on the applicant to satisfy me that a stay should be granted. I am of the view that he has done so at least to the point of stay. The matter does not, however, end there.

Conditions on Stay

In the alternate counsel for the defendant argued that as this was clearly being portrayed as a public policy appeal the plaintiff should pay the cost of the appeal irrespective of the outcome.

In his submissions to me counsel for the applicant emphasized the public importance of the case and its wider impact on the community and in particular Fijian Native Land Holdings.

In my decision I declared for the benefit of the defendant that it was not obliged to lease any catchment area that was the agreement reached at Deuba but I was also not satisfied that there was any legal obligation for it to do so. However, it now appears that the defendant wishes to re-visit that issue and the related aspects of any interests the Native Land Trust Board may have. I am satisfied that a major portion of the appeal is accordingly driven by the FEA’s direct interest in ascertaining legal principle at issue in order to provide itself with guidance in respect of its future dealings whether on actual legal proceeding are not with numerous other persons.

In such cases it is not unusual on granting leave to appeal or indeed on stay to require as a condition of the stay that the applicant pay the respondent’s cost of the appeal irrespective of the outcome. In my view, this is particularly important where the respondent needs protection from the costs of future litigation because they are poor and the additional appeal costs will be burdensome to them. (cf Oshlack v Richmond River Council [1998] HCA0011.1998 (25 February 1998) and American Home Assurance Co. v King [2001] NSWCA 201 and Deloitte Tushe Tohmatsu Trustee Co. Ltd. v Christchurch Pavillion Partnership No. 1, New Zealand Court of Appeal [2002] NZCA 127; [2002] 3 NZLR 215. Accordingly, while granting the application for stay it will be a condition of that grant of stay that the applicant pay the respondent’s reasonable costs and disbursements of the appeal irrespective of the outcome. These costs are to include the retention and briefing of senior counsel used in the case before me. These costs are to include payment of interim bills of account and disbursements presented for payment pending appeal, payment on invoices to be made within 14 days of presentation of the invoice. I emphasize that these costs should be reasonable. Any dispute about the quantum can be resolved by certification and taxation in the usual manner.

The defendant also submitted for my consideration a proposal that a modest sum be paid from the fund in Court as a part-payment of the plaintiff’s obligations. I do not accept that as appropriate. The defendant has secured the full judgment sum for the benefit of the plaintiffs pending the outcome of the appeal. Any money paid out now would largely be consumed by the expenses of trial and any small balance then remaining would quickly disappear into the lives and infrastructure of these needy people. I find that in those circumstances it would be impossible for the plaintiff to recover any part-payment if it was successful on appeal. Accordingly I reject the application by learned counsel for the respondents for a part-payment from the retained fund.

In the course of this hearing I was advised that some folk learning of the filing of this appeal became agitated at the clerk attending to this duty.

That is unacceptable. The Court will set its face against any challenge to the rule of its law. The disappointment that will be felt is completely understandable. However, inappropriate expressions of that disappointment can only harm the plaintiffs significant claim and so I ask them to trust the rule of law and act with the calm dignity that is the hallmark of their vanua.

Conclusion

I therefore grant a stay of my judgment and associated orders pending the outcome of the appeal on condition that:

1. The sum of $9,428,170.00 paid into Court is maintained in an interest bearing account in terms of my Order on the 1^st of December pending the decision of the Court of Appeal and
   
2. The applicant providing a written undertaking given to the respondents solicitor and filed in Court within 7 days guaranteeing payment of the reasonable costs of the appeal for the respondent irrespective of the outcome of that appeal.
   

Such costs to include payment of fees for senior counsel, all disbursements and any associated fees or charges reasonably incurred in processing the appeal. The undertaking is to provide that the appellant will pay these costs within 14 days of presentation of invoice.

Gerard Winter
JUDGE

At Suva
2nd December, 2005