White Industries Australia Ltd v Ruby Investments Ltd [2005] FJHC 408; HBC0125r.2004s (4 November 2005)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0125 OF 2004

Between:

WHITE INDUSTRIES AUSTRALIA LIMITED
Plaintiff

and

RUBY INVESTMENTS LIMITED
THOMAS ARCHER
KIM HUGHES
Defendants

Mr. F. Haniff for the Plaintiff
Mr. I. Roche for the Defendant

Date of hearing: 14 October 2005
Date of decision: 4 November 2005

DECISION
(Leave to Appeal, Stay application and Injunction)

There are the following three applications before the Court filed by the defendants:

(a) Summons dated 31 August 2005 seeking leave to appeal from part of the Orders made by me on 24 August 2005.

(b) Motion dated 1 September 2005 seeking order for stay of my orders of 24 August until the final determination of an appeal against the said orders AND an injunction restraining the plaintiff from taking any steps to procure the registration of mortgage dated 31 August 1994 being exhibit TWD 1 to the affidavit of Travers William Duncan sworn 20 July 2004 and filed herein.

(c) Summons dated 20 September 2005 seeking order that leave be granted for the Registrar of Titles to be joined as a Defendant to these proceedings AND an interim injunction be granted until further order restraining the Registrar of Titles from taking any steps to procure the registration of Mortgage dated 31 August 1994 being exhibit WWC 1 to the affidavit of William Wylie Clarke sworn on 6 September 2005.

The summons of 31 August came before me on 5 September 2005 when the applicant’s counsel failed to appear but Mr. Apted for the plaintiff/respondent was present. Since I was going on leave till 11 October, I adjourned the matter to 13 October 2005. However, both counsel appeared before me on 6 September 2005 when by consent I gave an interim stay of my order for payment into Court the sum of $1,450,000.00 until determination of application for leave to appeal to be heard on 14 October 2005. Orders were made to file and serve affidavits in reply.

I have before me for my consideration an affidavit of William Wylie Clarke, a solicitor, sworn 31 August 2005 in support of application for leave to appeal against part of my said Order and affidavit of Loloma Leweniqila sworn 20 September 2005.

The orders which I made on 24 August 2005 are as follows:

(a) Summary judgment is refused against the First Defendant but it (the First Defendant) is ordered to deposit into Court the sum of $1,450,000.00 within 28 days.

(b) The parties to without undue delay proceed with due diligence to have the matter entered for trial.

(c) The caveats lodged by the Second and Third Defendants against Certificate of Title No. 19263 are ordered to be removed immediately to enable the Plaintiff to register the mortgage in question.

(d) Liberty is reserved to either party generally to apply to Court on matters incidental to this Order.

Consideration of the applications

I have before me both the oral and written submissions of counsel.

Defendant’s/Applicant’s contention

On his leave to appeal counsel argues that the ‘judgment is clearly wrong’ and ‘if allowed to stand, its impact will cause substantial and incurable injustice’ without indicating the nature of the harm that will be caused to the applicant.

He agrees that the Court has the power to act under Or 14 r.4(3) of the High Court Rules but he says that this is not a proper case to impose condition.

On stay of order for payment into Court of the said sum, counsel submits that this is not a case in which the plaintiff will be deprived of the fruits of a judgment. The order sought, he says, does not affect the plaintiff in anyway. There can be no prejudice to the plaintiff if a stay is granted.

Counsel seeks an injunction restraining the registration of the mortgage by the Registrar of Titles and to join the Registrar as a party to the action.

The application is made pursuant to Order 29 rules 1 and 2.

Counsel says that it is in the ‘interests of both parties that the preservation of the status quo remains’. He agrees that ‘it has been 11 years since the signing of the mortgage’. He submits that the ‘validity and enforceability of the mortgage is a central issue to the Defendants’ defence’.

On the inclusion of the Registrar of Titles as a defendant, Mr. Roche further submits that this is crucial to the protection of the status quo as it relates to the rights of the defendant. He says that this has arisen due to the plaintiff procuring the registration of the said mortgage by lodging it for registration with the Registrar of Titles. He says that if the Registrar of Titles carries out his statutory function, he will deprive the Defendants of their time barred defence.

Now in this application, while admitting that ‘on its face however, the mortgage appears to be regular, and hence appears to be in registrable form’, Counsel now raises in his submission his concern about the execution of the mortgage. He says that the evidence at the trial will be that the second and third defendants signed the instrument but did not affix the seal of the first defendant in the manner prescribed by s.5(1) of the Property Law Act, Cap. 130.

Plaintiff’s opposition to the applications

Mr. F. Haniff in opposing the application said that the defendants are seeking leave to appeal an interlocutory decision.

Counsel referred the Court to a number of authorities in support of his argument in opposition and said that the defendants have a formidable task as there is a prima facie presumption in favour of the correctness of the decision in question and of the proper exercise of the Court’s discretion. (O’Leary CJ in Nationwide News v. Bradshaw [1960] C (NT) 1; Australian Cool and Shale Employees’ Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621, Kitto J.

Mr. Haniff also cited a number of authorities particularly judgments of Court of Appeal to the effect that interlocutory orders and decisions will seldom be amenable to appeal, with leave only granted in exceptional circumstances. (Edmund March & Ors. v. Puran Sundarjee & Ors. [Civ. App. ABU0025 of 2000 at p9]; Kelton Investments Ltd & Anor v CAAF & Anor [Civ. App. ABU0034 of 1995].

Counsel said that the Court exercised its discretion properly and applied Or 14 r 4(3) which allowed imposition of condition after the Court having found that the mortgage was executed and that nothing has been paid thereunder.

Furthermore, he submits that the Court followed the decision of the Court of Appeal in Alis Civil Engineering Limited & Anor v Fiji Development Bank & Others (Civ. Appeal No. 60 of 2003 (called Bahadur Ali case) where the Court said:

“Dr. Sahu Khan referred us to Harvey v McWaters (1948) SRNSW and suggested that since the validity of the debenture was itself in question the rule in Inglis did not apply. While we accept the rule in Inglis is modified where the validity of the security is in question we do not agree that Harvey v McWaters is authority for the proposition that in those circumstances no amount is to be paid in by the mortgagor at all. It is clear from the judgment the sum required to be paid in is the value of the security itself. In our view the High Court erred in not ordering the payment of this amount.” (emphasis added).

Mr. Haniff said that the Court exercised its discretion properly and made the order in terms of the said Bahadur Ali case.

As far as the defence based upon the provisions of the Limitation Act Cap. 35 is concerned, section 8 provides for the bringing of action before the expiration of ‘twenty years from the date when the right to receive the money occurred’. Here the recovery was commenced on 22 April 2004 which is well within the 20 years limitation period.

On stay pending appeal counsel submitted that the Court ordered payment on the basis that there was an executed mortgage with nothing paid under it following Bahadur Ali case. There the Court of Appeal said that where the validity of the mortgage itself is in issue, it was still incumbent on the Court to require payment into Court the value to the security itself and this is exactly what this Court has done.

On injunction preventing registration of mortgage, he opposes the application and said that if the mortgage is registered, any actions on the mortgage e.g. a mortgagee sale, it can be stopped by this Court because the first defendant would simply need to pay into Court the value of the security. He says that a mortgage does not need to be registered to be valid.

Counsel further makes the point that there is no evidence before the Court of its financial position. All Mr. Clarke for the defendant said in his affidavit is that “I have instructions to give an undertaking as to damages” in support of application for injunction. He said that in Bahadur Ali case the Court of Appeal in a similar undertaking as to damages said that “in view of the extent of the second plaintiff’s indebtedness the undertaking as to damages offered by the first plaintiff appears to be worth very little”.

Consideration of the applications

The application for leave is made by the first defendant pursuant to section 12(2)(f) of the Court of Appeal Act. Leave of this Court is required from an interlocutory order and here the application is essentially on the order for payment into Court.

I have considered the submissions of both counsel in regard to the applications as set out hereabove.

On application for leave I am inclined to refuse it.

When I made an order for payment into Court I gave my reasons for doing so and exercised my discretion. The case of Bahadur Ali, (a Court of Appeal decision) is supportive of my decision.

The various authorities referred to by Mr. Haniff are relevant and I have taken these into consideration.

In Edmund March case (supra) at p.9 sitting as a single Judge of Appeal, I said:

“As stated by Sir Moti Tikaram, President Fiji Court of Appeal in Totis Incorporated, Spor (Fiji) Limited & Richard Evanson v John Leonard Clark & John Lockwood Sellers (Civ. App. No. 35 of 1996S p.15: ‘it has long been settled law and practice that interlocutory orders and decisions will seldom be amenable to appeal. Courts have repeatedly emphasised that appeals against interlocutory orders and decisions will only rarely succeed. The Fiji Court of Appeal has consistently observed the above principle by granting leave only in the most exceptional circumstances’.”

In Kelton Investments Ltd & Anor v CAAF & Anor (Civil Appeal ABU0034 of 1995), the Court of Appeal said:-

“I am mindful that Courts have repeatedly emphasised that appeals against interlocutory orders and decisions will only rarely succeed. As far as the lower courts are concerned granting of leave to appeal against interlocutory orders would be encouraging appeals (see Hubball v Everitt and Sons (Limited) [1900] UKLawRpKQB 17; [1900] 16 TLR 168).

Even where leave is not required the policy of appellate courts has been to uphold interlocutory decisions and orders of the trial Judge – see for example Ashmore v Corp of Lloyd’s [1992] 2 All ER 486 where a Judge’s decision to order trial of a preliminary issue was restored by the House of Lords.”

In K R Latchan Brothers Limited v Transport Control Board, and Tui Davuilevu Buses Limited – Civil Appeal 12 of 1994 a full Court of Appeal (Tikaram J, Quillam J and Savage J) endorsed the decision of Thompson J, where sitting as a single judge of appeal, Thompson J said:

“The granting of leave to appeal against interlocutory orders is not appropriate except in very clear cases of incorrect application of the law. It is certainly not appropriate when the issue is whether discretion was exercised correctly unless it was exercised either for improper motives or as a result of a particular misconception of the law.”

Also in Latchan at p5 it is stated in the judgment:

“We do not agree that the intended question for the Court of Appeal involves a point of law of any great significance. The control of proceedings is always a matter for the trial Judge. We adopt what was said by the House of Lords in Ashmore v Corp of Lloyd’s [1992] 2 All ER 486 –

‘Furthermore, the decision or ruling of the trial judge on an interlocutory matter or any other decision made by him in the course of the trial should be upheld by an appellate court unless his decision was plainly wrong since he was in a far better position to determine the most appropriate method of conducting the proceedings’.”

On 24 August 2005 in the said Decision on application for summary judgment by the plaintiff herein I held that it was not denied that the mortgage has been executed but not registered because of the caveats lodged by the second and third defendants. Also, it is not disputed that nothing has been paid under the mortgage by the defendants.

In the circumstances of this case, I am prepared to substitute payment into Court with an order for providing a Bank Guarantee for the said amount as I did in Tappoo Holdings Limited & Tappoo Limited v Robert Arthur Stuchberry Civil Action No. 355 of 2001. The plaintiff is agreeable to this form of order as stated in the counsel’s submission.

Because of the view that I hold on leave application, I will refuse application for stay of order for payment into Court.

My order for removal of caveats is accepted by the applicant.

As far as the application for injunction against the Registrar of Titles is concerned to register the mortgage, I will refuse the application now that the mortgage document has already been lodged for registration.

I will, however, to protect the interest of the defendant/applicant grant an injunction restraining the plaintiff from exercising its power of sale under the mortgage if and when that situation arises until the hearing and determination of this action. This course of action is also acceptable to the plaintiff.

As for the joinder of the Registrar of Titles as a party to the action, I will defer my decision until the proposed appeal is disposed and before the trial commences.

Orders

It is ordered as follows:

(a) Leave to appeal from the order for payment into court of the sum of $1,450,000.00 is refused, but the order is varied by substituting it by an order that the first defendant give a Bank Guarantee in the said sum pending the hearing and determination of this action if it is acceptable to the defendant, otherwise the order stands.

(b) Stay of the order is refused.

(c) Although application for Injunction against the Registrar of Titles to register the mortgage is refused as it has already been lodged by the Plaintiff for registration as ordered, the Plaintiff is restrained from exercising its power of sale under the mortgage should the occasion arise until the hearing and determinations of this action.

(d) Decision on the application to join the Registrar of Titles as a party to the action is deferred until the proposed appeal herein is disposed and before the commencement of the trial of this action.

(e) The costs are to be costs in the cause.

D. Pathik
Judge

At Suva
4 November 2005