Rasigatale v Raikuna [2006] FJHC 57; HBC156.2006 (20 July 2006)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. 156 OF 2006

NO. 141 OF 2006

BETWEEN

MANOA RASIGATALE, JOSAIA TAREGUCI and FAIYAZ MOHAMMED
as President, Secretary and Treasurer of FIJI PROFESSIONAL GOLFERS ASSOCIATION
Plaintiff

AND

SAIMONI RAIKUNA and VERAMU ROKOTAVAGA
of Suva
Defendants

Appearances: KOYAS for the plaintiff
SOSEFA INOKE for the defendants

Hearing: 11 July 2006
Decision: 20 July 2006

DECISION

Background

[1] All of the parties in these proceedings claim to be members of the Fiji Professional Golfers Association (the Association).

[2] The Association is a sporting body registered under the Industrial Associations Act, Cap 95. It’s objects include inter alia to promote interest in golf and to protect the interests of it’s members.

[3] On 9 June 2006, the plaintiff’s in their capacities as President, Secretary and Treasurer of the Association commenced this action against the defendants. They obtained an injunctive order which was granted ex-parte on the same day (the 9 June order).

The 9 June order

[4] The interim prohibitory injunction in favour of the plaintiff’s has been extended until today. The terms of the order are that:

(i) the defendant’s be restrained whether by themselves, their agents and/or servants or otherwise howsoever from using the Association’s name to organize any golf championship using the Association’s name and carrying out any business of the Association.

Other orders made which were mandatory in nature were vacated by consent at the hearing of the present application on 11 July 2006.

Continuing dispute

[5] This is not the first time that members of the Association have brought their internal disputes to this Court for resolution. In similar proceedings filed in 2005, Manoa Rasigatale, Krishna Singh and Vilikesa Kalou –v- John Lee, Saimoni Raikuna & Others, (Civil Action 220 of 2005), (the first action), the first named plaintiff herein was amongst other office bearers who sued another group of members, including both defendants in the present case.

[6] A consent order was agreed to by the parties in the first action. The terms of that order made on 6 March 2006 are set out below:

"...... BY CONSENT IT IS HEREBY ORDERED as follows:

1. THAT the appointments of office bearers of both parties herein are dissolved forthwith.

2. THAT with effect from today the following persons are appointed as an interim committee to run the Fiji Professional Golfers Association:

(i) Manoa Rasigatale

(ii) Veramu Rokotavaga

(iii) Saimoni Raikuna

(iv) Anasa Seruvatu

(v) Muhmood Buksh

(vi) Josaia Tareguci

3. THAT the interim committee shall have the Annual General Meeting of Fiji Professional Golfers Association by 20 June, 2006.

4. THAT no other persons or body other than the Interim Committee is authorized to conduct any activities under the name of Fiji Professional Golfers Association.

5. THAT the Injunction granted on 24 January 2006 herein be dissolved.

6. THAT in the event of dispute as to membership or decision of the interim committee the same is to be determined by two independent lawyers to be appointed by plaintiff’s solicitors and defendant’s solicitors.

7. THAT there shall be no order as to costs.

8. THAT the objectives of the interim committee are to establish membership criterion amongst other things".

[7] A copy of the sealed order is annexed "MRI" in the affidavit of Mr. Rasigatale of 8 June 2006 filed in support of the ex-parte application for injunctive relief. The order is the only record I have of the first action – the Registry was not able to locate and deliver the file of that case to me before today.

[8] However it is now apparent that the agreement recorded and endorsed by the Court in March, which I shall refer to as the March agreement, has not resolved the festering dispute in the Association. Four months later several of the same parties are back before the Court again.

The present application

[9] The plaintiff contends that the 9 June order be continued. There are two affidavits by Mr. Rasigatale filed in support of the injunctive relief sought.

[10] The defendant’s contend that the 9 June order should be dissolved forthwith. Mr. Raikuna’s affidavit in reply filed 3 July 2006 strongly disputes the factual basis upon which the plaintiff’s obtained the injunctive relief. Learned counsel for the defendant’s, Mr. Sosefo Inoke argued the following grounds for dissolution:

(i) the plaintiffs are not executive committee members of the Association because the Special General Meeting held on 20 May 2006 appointing them was not properly constituted – Notice provisions in the Association’s Rules were not complied with. The decisions made at that meeting are therefore invalid and accordingly the plaintiffs have no locus standi to bring these proceedings

(ii) there has been material non-disclosure by the plaintiffs at the time the injunction was sought and granted

(iii) the plaintiffs filing of fresh court proceedings is contrary to the spirit of the March agreement which required the parties to resolve issues and differences out of court

(iv) the plaintiffs undertaking as to damages is insufficient.

Plaintiff’s objection to defendants being heard

[11] At the commencement of the hearing, learned counsel for the plaintiffs, Mr. Koya, raised a preliminary objection to the defendant’s right to be heard. He relied on the principles enunciated in Hadkinson –v- Hadkinson [1952] 2 A11ER 567. I had heard him earlier that morning on an ex-parte application under Order 52 of the High Court Rules for leave to issue contempt proceedings against the defendant’s. The plaintiffs have alleged that the defendant’s have breached the terms of the 9 June order. The leave sought was granted.

[12] Mr. Koya relied on the rule discussed on page 569 of the Hadkinson case that anyone who disobeys an order of the court is in contempt of the court and that no application to the court by such a person will be entertained until he has purged himself of his contempt.

[13] I declined the objection on the basis that the Hadkinson case was clearly distinguishable. In addition, in the present case I have merely granted leave pursuant to Order 52 rule 2. The provisions of Order 52 require that the defendants be heard before a finding of contempt can be made against them. Mr. Koya was not able to refer me to any authority supporting his contention that the grant of leave sufficed and on that basis I should refuse to hear the defendants.

[14] I indicated to both counsel in the course of the hearing that unless they established the legal basis of their respective contentions, I would treat the submission as having not been sufficiently established.

The sentiments expressed by Lyons J about submissions come to mind:

"The first task of any lawyer making submissions is to assemble the relative facts. The facts are those matters which distinguish each case from any other. Having assembled the relative facts and pointed them out to the Court, the legal principles applicable to those facts must then be identified. Having performed that task, the submissions surrounding both the law applicable and the facts are then made..."

Dhan Kaur & Anr. –v- Tevita Mara Vitukawalu & Others (Unreported Civil Action No. HBC 0233 OF 1993l, P.4)

Consideration of application

[15] An interim injunction provides relief that is both temporary and discretionary. Before granting such relief, the Court is required to carefully balance or weigh the needs of a plaintiff against the needs of a defendant. The starting point for the consideration as to whether the order sought should be maintained or granted are the principles expressed in American Cyanamid –v- Ethicon Limited [1975] UKHL 1; [1975] A.C. 396. At pages 406 & 407 of the judgment Lord Diplock expresses the principles as follows:

"The object of the interlocutory injunction is to protect the plaintiff against the injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty will resolve in his favour at the trial; but the plaintiff’s need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated under the plaintiff’s undertaking in damages if the uncertainty will resolve in the defendant’s favour at the trial. The Court must weigh one need against the other and determine where "the balance of convenience lies."

On page 407 Lord Diplock said:-

"It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavits as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial. One of the reasons for the introduction of the practice of requiring an undertaking as to damages upon the grant of interlocutory injunction was that "it aided the court in doing that which was its great object viz. abstaining from expressing any opinion upon the merits of the case until the hearing": Wakefield v. Duke of Buccleugh (1865) 12 L.T. 628, 629. So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought."

It is upon this basis that I consider the application before me.

[16] The fundamental requirements might be summarized as:-

(i) Are damages an adequate remedy?

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

(iii) Where does the balance of convenience lie?

Per Connors J in Air Pacific Limited –v- Airports Fiji Limited (Civil Action HBC 418 of 2003L)

Serious issue to be tried

[17] There are clearly serious issues to be tried based on the affidavit material upon which the parties rely. For the reasons stated above, it is not for this court in an application for an interim injunction to carry out a trial of the merits of the dispute. It is suffice for the Court to be satisfied that that there is in fact a serious issue to be tried.

[18] I accept that on the face of it, that there are serious questions to be tried between the parties. The affidavit material filed by the plaintiff’s and the statement of claim clearly sets out the plaintiffs causes of action. The basis of these are:

(i) whether the defendants’ actions in organizing golf tournaments in May and June 2006 on the purported authority of the Association is fraudulent and unlawful

(ii) whether the defendants are unlawfully generating income through sponsorship and tournament fees which income is lawfully payable to the Association

(iii) whether the defendants are fraudulently and unlawfully holding themselves out as legitimate representatives of the Association causing loss and damage to the Association

(iv) whether the defendant’s have unlawfully operated the Association’s bank account.

[19] The affidavits relied on by the plaintiff contains sufficiently credible evidence of the merits of the plaintiff’s case – see for example Annexures MR6, MR7 and MR8 of Mr. Rasigatale’s affidavit of 8 June 2006. I note also that a statement of defence has not been filed.

[20] The right which the plaintiff’s seek to protect is the right accorded to them at the disputed Annual General Meeting held on 20 May 2006. They maintain that they were duly elected as office bearers of the Association at that meeting – as President, Secretary and Treasurer respectively. As elected office bearers they comprise the Executive Committee and as such hold the mandate to manage the Association, to organize tournaments and to control the finances of the Association. The responsibilities of holding such office is set out in clauses 14 and 15 of the Rules of the Association – annexure A in Mr. Raikuna’s affidavit in reply. The plaintiff’s maintain in effect that the defendant’s have fraudulently and unlawfully usurped this role causing loss and damage to the Association.

[21] It is convenient at this juncture to consider the defendant’s submission that the meeting of 20 May 2006 was not properly constituted and as such the plaintiff’s lack locus standi to bring these proceedings. It is contended that their appointments as elected office bearers is null and void due to the failure to comply with notice provisions in the Association’s Rules. The defendant’s rely on clauses 19 and 22 of the Rules.

[22] It is not seriously disputed that the 28 days notice period was not complied with – paragraph 7 of the statement of claim admits to it being two days short of the prescribed requirement. The plaintiffs contend that the reasons for continuing on with the meeting are justifiable. The effect of the non-compliance on the decisions, including the election of office bearers, taken at the 20 May meeting, in my view, is also a serious issue to be tried. It simply cannot be decided on the basis of the contested facts and untested evidence now before the Court. In the course of the hearing I asked Mr. Inoke to address me on the legal principles and case law authority he was relying on to support the proposition of invalidity and lack of standing made. He replied that the breach was clear on the face of the documents. That may be so but in my view having not submitted on the relevant law upon which the defendant’s rely, he has failed to sufficiently establish the legal basis of his arguments and for this reason as well I have declined to uphold the submission made. The legal principles applicable to the facts relied on were not traversed in any manner whatsoever – the comments of Lyons J in Dhan Kuar, supra, are applicable.

The consequences which flow from breaches of the Rules, if these are established at the trial, is a legal issue that should await proper legal submission and consideration.

Are damages an adequate remedy?

[23] In my view damages would not be an adequate remedy given the circumstances of this case. Neither of the parties have quantified any loss or damage. What is at stake is more than money. It is the reputation of the Association and of the plaintiff’s, the management of the Association’s business and the control of it’s finances. The adverse effects of the continuing internal disputes of it’s members is not a matter that can be easily quantified in monetary terms. Given this scenario, it is difficult to see that damages, even if they were capable of assessment, would in fact be an adequate remedy. The factual material before the court shows that damages would not be an adequate remedy if the injunction sought was not granted.

Balance of convenience

[24] The balance of convenience is the requirement on a Court to carefully weigh the rights of the parties and reach a decision that accords with justice and fairness. It is the guiding principle in granting an interlocutory injunction and as Somers J said in Congoleum Corporation Ltd – v- Poryflor Products (NZ) Ltd [1979] NZCA 25; [1979] 2 NZLR 560 at 571:

"[It] involves a decision as to whether the granting of an injunction or its refusal is the course which, after the action itself has been tried, and the issues between the parties determined would best allow the adjustment of the rights of the parties in a way that accords with fairness and justice".

[25] The defendant’s do not assert any rights of management as provided for in the Rules of the Association. They contend that there are now two factions within the Association – the East faction and the West faction. I note that the Association Rules only provides for a single national body. The defendant’s state that they represent the East faction. But nowhere in Mr. Raikuna’s affidavit is a claim to a right which the plaintiff’s assert. There is no evidence before me whatsoever to even suggerst that they have been duly elected office bearers under the Association Rules. Having also determined that damages would not be an adequate remedy for the plaintiff the balance of convenience tips in their favour.

Status quo

[26] In the course of his argument Mr. Koya submitted that given the inadequacy of damages to either party, the status quo ought to be maintained. I agree.

[27] There are reasons for preserving the status quo if that is available to the Court. As Lord Diplock pointed out in American Cyanamid at p. 408:

"Where other factors appear to be evenly balanced, it is a counsel of prudence to take much measures as are calculated to preserve the status quo. If the defendant is enjoined temporarily from doing something that has not been done before, the only effect of the interlocutory injunction in the event of his succeeding at the trial is to postpone the date at which he is able to embark upon a course of action which he has not previously found it necessary to undertake; whereas to interrupt him in the conduct of an established enterprise would cause much greater inconvenience to him since he would have to start again to establish it in the event of his succeeding at the trial".

[28] As I have stated earlier, the defendant’s are not asserting any rights properly vested in them under the Rules of the Association entitling them to represent and manage the Association and to control it’s finances. If they and the members they represent are dissatisfied with the performance of the plaintiffs, there are legitimate avenues open to them under their rules to pursue the plaintiff’s removal as office bearers. Unless they themselves are given the mandate by the members at a meeting pursuant to the Association’s Rules, to manage the Association, the status quo should be maintained.

I have upheld Mr. Koya’s submission that in the circumstances the status quo should be maintained.

Material non-disclosure

[29] The defendants submit that there has been a number of non-disclosures which taken as a whole shows material non-disclosure. Mr. Inoke prepared a helpful summary of the defendants contentions.

[30] A useful analysis of the principles I am required to consider is contained in the Extempore Judgment of Connors J in Nagamma & Ani –v- Mohammed Sheik Khan & Others (Civil Action No. HBC 168 of 2003L at page 2):

"It is trite to say that an applicant for ex-parte orders must be frank and candid in disclosing material matters to the court. This obligation of candor includes, especially disclosure of matters that may be adverse to the applicant’s case. Any breach of that obligation of candor on an application for interlocutory injunction will generally lead to the dissolution of any orders made pursuant to that application.

The defendants in their submission take the court to Rex –v- Kensington Income Tax Commissioners [1917] 1 KB 486 which is approved in fiji by Civil Appeal No. 66 of 1984, a decision of the Fiji Court of Appeal in Rauzia Mohammed –v- ANZ Banking Group. In that decision the court cited a statement made in Dalglish –v- Jarvie [1850] EngR 688; 2 Mac. & G. 231 which statement was cited with the approval by Lord Cozens-Hardy M. R. in Rex –v- Kensington Income Tax Commissioners and I quote:

"It is the duty of a party asking for an injunction to bring under the notice of the court all facts material to the determination of his right to that injunction; and it is no excuse for him to say that he was not aware of the importance of any facts which he has omitted to bring forward."

The Court of Appeal also relied upon the Repulic of Peru –v- Dreyfus Bros. & Co. 55 L.T.R 802 Kay J. stated and I quote:-

"I have always maintained, and I think it is most important to maintain most strictly, the rule that, in ex-parte applications to this court, the utmost good faith must be observed. If there is an important misstatement, speaking for myself, I have never hesitated, and never shall hesitate until the rule is altered, to discharge the order at once, so as to impress upon all persons who are suitors in this court the importance of dealing in good faith with the court when ex-parte applications are made."

Again the Fiji Court of Appeal noted that this passage was previously cited in approval in Rex –v- Kensington Income Tax Commissioners. There can be no doubt that any failure to disclose material facts will justify and cause the court to set aside orders granted ex-parte.

[31] I have considered each of the instances set out by Mr. Inoke relied on by the defendant’s in support of this submission. I am unable to agree with him. The facts relied on by both parties are very strongly disputed by each and the evidence which is relied on by Mr. Inoke to support the conclusions he draws is not convincing. Take for example, the first point, that the plaintiffs are not truthful about the 8 May meeting. In paragraph 4 of his affidavit Mr. Raikuna says that Mr. Buksh advised him that he (Mr. Buksh) was very surprised and was not happy with the way the plaintiffs had acted in haste and that he felt compelled to go along with whatever they wanted – that was how Mr. Buksh is alleged to have described to him the 8 May meeting of the Interim Committee appointed by the March agreement. The annexure marked MR2 in the affidavit of Mr. Rasigatale is a copy of the signed minutes of that meeting. Mr. Buksh also signed those minutes. The minutes appear to confirm that Mr. Buksh seconded the motion for the proposed 20 May meeting. He appears to have disbursed $150-00 to meet the traveling expenses of members traveling from the Western Division to attend the proposed meeting. His signature is endorsed on the Minutes of the Meeting. That is not evidence of a person being compelled to do something he did not want to do as has been suggested. All he had to do was to decline to sign the minutes if they did not reflect the true record of what transpired at the 8 May meeting.

[32] Most of the facts relied on are very strongly disputed. Proper findings can only be made as to the truth or otherwise of the competing facts after trial.

[33] In my opinion the duty of utmost good faith has not been breached. It has not been established that the plaintiffs misled the Court when the ex-parte application was made. The plaintiffs did not fail to disclose matters which are or would have been at that time material to the court in considering whether or not to grant the relief sought.

The undertaking as to damages

[34] The defendants submit that the plaintiff’s undertaking is inadequate. However they have not attempted to quantify the nature of any damages which they may suffer and which the plaintiffs would be required to pay if the injunction were to continue and if they succeeded at the trial. Given the paucity of evidence from the defendants in this regard, I have concluded that there is no danger to them of irrecoverable damage being incurred as a result of the 9 June order being continued.

[35] The absence of adequate security for an undertaking may provide sufficient reason to refuse the application for interim relief. But in exceptional circumstances relief may still be obtained even though there is a real risk that the undertaking could prove inadequate. Allen –v- Jambo Holdings [1980]1WLR 1252. In the absence of evidence by the defendants as to damages accruing to them and given that the plaintiff is essentially a sporting body without assets and there is no evidence before me of the nature of losses that continuation of the injunction might entail, in my view the present case falls with the exceptional circumstances above.

Plaintiff’s acted contrary of the spirit of the March agreement in bringing fresh proceedings

[36] The defendants submit that the March agreement required the parties to submit membership disputes or disputes concerning decisions of the interim committee to be determined by two independent lawyers. Mr. Inoke submits that the disputes giving rise to the subject matter of this action should be determined by two independent lawyers, and not the Court – in keeping with the spirit of the consent order entered in pursuance of the agreement. There is much force in that argument. Surely it was in the contemplation of the parties, including the plaintiffs, that the Association’s internal disputes be resolved not in a Courtroom but between themselves and if necessary assisted by independent mediators.

[37] The defendants have not abandoned that option. Mr. Inoke informed the Court that his clients propose that another Special General Meeting be held to facilitate resolution independently of the Court. The plaintiffs are reluctant given the history of previous meetings which have not resolved their differences. However they are prepared to attend another meeting if the court orders that this course be pursued.

[38] In my opinion the better course for all parties concerned is to resolve the existing internal disputes without resource to litigation, if possible. Given the willingness of the defendants to have the disputes resolved by all the Association members at a meeting which accords with the prescribed meeting rules, a meeting will be ordered to facilitate the alternative dispute resolution process proposed.

MY ORDERS

(1) THAT the order made herein on 9 June 2006 restraining the defendants whether by themselves, their agents and/or servants or otherwise howsoever from using the Association’s name to organize any golf championship using the Association’s name and carrying out any business of the Association continues and is extended until 4.00pm 22 September 2006.

(2) THAT with effect from today the following persons are appointed as an interim committee to run the Fiji Professional Golfers Association:

(i) Manoa Rasigatale

(ii) Josaia Tareguci

(iii) Faiyaz Mohammed

(iv) Saimoni Raikuna

(v) Veramu Rokotavaga

(vi) Muhmood Buksh

(3) THAT the Interim Committee shall cause to be held a Special General Meeting of the Association on or before 20 September 2006.

(4) THAT the Interim Committee shall give notice of the Special General Meeting in accordance with the Rules of the Association.

(5) THAT the Interim Committee shall nominate a Chairperson for the Special General Meeting, such person to be approved by the Court within 14 days.

(6) THAT in the event of any dispute as to those eligible to participate in the meeting, such dispute is to be resolved by the Chairperson who shall be at liberty to refer the matter to the Court if necessary.

(7) THAT each party at liberty to apply on three days notice.

(8) THAT costs shall be in the cause.

Gwen Phillips
JUDGE

At Lautoka
20 July 2006