Prasad v Narhari Electrical Company Ltd [2005] FJHC 444; HBC0427.2005 (19 October 2005)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO.: HBC0427 OF 2005

BETWEEN:

RAJESH PRASAD
PLAINTIFF

AND:

NARHARI ELECTRICAL COMPANY LIMITED
FIRST DEFENDANT

BANK OF BARODA
SECOND DEFENDANT

Mr. A.K. Singh with Mr. R. Chaudhary for Plaintiff
Mr. D. Sharma with Mr. N. Lajendra for First Defendant
Mr. W. Huare for Second Defendant

Date of Hearing: 6th October 2005
Date of Decision: 19th October 2005

DECISION ON INTERLOCUTORY INJUNCTION

The plaintiff filed a writ of summons on 23^rd August 2005 together with a motion seeking that the defendants be restrained from attending settlement and/or registration of transfer of CT 26971 until further order of the court.

The plaintiff has filed a rather lengthy statement of claim. The essence of the claim is that he was the registered proprietor of CT 26971. He mortgaged the title to the second defendant a security for a substantial loan. He says that he defaulted a payment to the Bank. He alleges that the second defendant pressured him to sell the mortgaged property to the first defendant, which was also the second defendant’s client. He alleges that even though the property was sold by private treaty, in essence it was a mortgagee’s sale. He alleges undue influence and that he had no independent advice regarding the sale. He further alleges that he sold the land at a price substantially below market value.

This is an appreciation for interim injunction so the American Cyanamid principles are the guiding principles in the exercise of the discretion.

There is no doubt in my mind that the plaintiff has raised services matters. The first defendant in its defence alleges that the plaintiff had independent legal advice. The second defendant admits that it held a mortgage over the relevant property but denies in any way interfering with or pressuring the plaintiff to sell the property. It says it held back the mortgagee’s sale to enable the plaintiff to sell the property by private negotiation.

Once I have concluded that the pleadings disclosed serious issue, the next step is to consider whether damages is an adequate remedy. The plaintiff says he was coerced to sell the property at an undervalue. If that is so then damages is the appropriate remedy. No doubt the second defendant, which is a well established Bank in Fiji, would be able to pay such damages. The plaintiff on the other hand has given “usual undertaking” as to damages. He has not disclosed what is his current financial position or what is the value of his assets and what liabilities he has. The action deals with a property, which was sold for $600,000.00 so there is substantial amount of money involved. Given the plaintiff’s admitted failure to make his payments under mortgage, I treat his undertaking as being suspect. The Court of Appeal in Natural Waters of Viti Ltd. v. Crystal Clear Mineral Water (Fiji) Ltd. – ABU0011 of 2004 stated that “applicants for interim injunctions who offer an undertaking as to damages should always proffer sufficient evidence of their financial position”. Further I was shown a copy of the relevant title, which shows that the transfer to the first defendant was registered on 5^th August 2003 before the present application was made. Hence this application was made too late leaving only damages as the proper remedy.

Mr. A.K. Singh, Counsel for plaintiff, sought to amend his order by including an order restraining the first defendant from encumbering or further developing the property. Mr. Sharma has objected to the amendment a rightly so because if the plaintiff had conducted a thorough search, he would have realized that the transfer had been done to the time application was done. I am not minded to allow the amendment at such late stage.

I shall next consider the balance of convenience. The plaintiff’s assertions that he was coerced to sell the property and there was exercise of undue influence and that he had no independent advice being remarkably hollow and strange. The written documents effectively nullify such assertions. Generally speaking a court ought not to resolve difficult issues of fact of law in considering an application for interlocutory injunction, it was not completely precluded from doing so particularly where contemporary documents point to strength of a party’s case – Series 5 Software Ltd. v. Clarke & Others – 1996 1 ALL ER 853.

Bahadur Ali v. Fiji Development Bank – ABU0057 of 2004 at page 7 where it stated that in appropriate cases disputed issues of fact can be resolved in affidavit evidence. The plaintiff had signed a Sale and Purchase Agreement and a transfer at the outset on 20^th March 2004. He states that the agreement was signed before a solicitor acting for both parties. He states that the Sale and Purchase Agreement was later terminated and he relies on Annexure A suggesting that the deal had been actually terminated. However it is not signed by the first defendant. In fact by Annexure R of affidavit Vasantilal Harikisun which is a letter written on 20^th August 2004, the first defendant denies reaching any agreement to terminate and then sets out on terms on which it might consider. These were never accepted by the plaintiff.

Further a series of letters contained in Harikisun affidavit show that the plaintiff wanted the transaction to proceed. By annexure U he asked the second defendant to discharge the mortgage on the title 26971 to enable the transfer to be registered. It is signed by the plaintiff and witnessed by G.P. Lala, a solicitor. The Bank advised G.P. Lala & Associates the sum owed to it to enable payment. The plaintiff also arranged with Credit Corporation of Fiji to pay off its debt from the proceeds of sale. It is on basis of plaintiff’s authority and instructions that the solicitors Messrs R. Patel & Co. paid off the plaintiff’s debt of $66,000.00 to Credit Corporation and $307,000.00 to Bank of Baroda. The plaintiff has taken benefit of these funds being deposited in his account. If he really considered the agreement had been terminated, why did he not refund the money? He has taken benefit of the moneys and now he wants to deny the first defendant the use of the land in question. The annexures BB, CC, DD and HH to Harikisun affidavit show that the plaintiff was well aware of what was happening.

The balance of convenience and overall ends of justice quite clearly point in the direction that I should refuse the plaintiff the interlocutory injunction. The application is therefore dismissed. In view of the size of the affidavits filed which must have taken considerable time and effort I order the plaintiff to pay costs of $900.00 to each of the defendant’s within fourteen (14) days.

[ Jiten Singh ]
JUDGE

At Suva
19^th October 2005