Sharma v Akhil Projects Ltd [2008] FJHC 290; HBC155.2002 (20 June 2008)

IN THE HIGH COURT OF FIJI
AT LAUTOKA

CIVIL ACTION NO. HBC 155 OF 2002

BETWEEN

TOTA RAM SHARMA
f/n Ram Chandra Sharma
Plaintiff

AND

AKHIL PROJECTS LIMITED
Defendant

Appearances: Mr. Abhay Kumar Singh for the plaintiff/applicant
Mr. Karam C. Ramrakha and Mr. Anu Patel for the defendant/respondent

Date of Hearing: 13 June 2008
Date of Ruling: 20 June 2008

RULING

[1] By summons issued on 14 May 2008 the defendant seeks the following orders:

(a) That the decision of the Hon. Madam Justice Phillips dated 9th May 2008 be stayed until the hearing and determination of the plaintiff’s appeal in the Fiji Court of Appeal.

(b) That the Deputy Registrar of the High Court at Lautoka be ordered to release the transcript of the tape recording in respect of this matter within 14 days from the date of the said order.

(c) That the Deputy Registrar of the High Court at Lautoka be ordered to release the copy of all the recorded tapes to the plaintiff in respect of this matter within 14 days from the date of the said order after the plaintiff had paid the relevant charges and cost.

(d) That the defendant be ordered not to dispose or to remove any assets from the jurisdiction of this Honourable Court until the hearing and determination of the plaintiff’s appeal in the Fiji Court of Appeal.

(e) That the service and hearing of this summons be abridged to 7 days and or earlier as the Court may deem just.

(f) That the cost of this action be in the cause.

[2] Prayer (d) was withdrawn by the plaintiff when the matter was heard. The application is supported by two affidavits of Tota Ram Sharma, the plaintiff. Mr. Sharma deposed that he would be prejudiced if a stay was not granted and he was forced to re-convey the property comprised in ‘Certificate of Title being Lot 1 on DP 8041’. Further that he would lose everything as the defendant is a limited liability company and there is no guarantee that it would not dispose of its properties. He stated that there would be no prejudice to the defendant ‘as it does depend on the fruit of the judgment’. Mr. Sharma deposed that a stay of the judgment will not affect the defendant but if refused will cause substantive losses to the plaintiff. The particulars of the perceived losses have not been disclosed. He stated that he has two properties worth over $300,000.00 and that he was in a position to pay the defendant any damages that may accrue to it as a result of his application. A copy of his proposed grounds of appeal was annexed in his first affidavit.

[3] The application was strongly opposed. Mr. Akhil, Managing Director of the defendant maintains that the plaintiff’s purpose in resorting to litigation was for the ulterior motive of blackmailing the defendant to pay him large sums of monies. He stated that the plaintiff has come to this Court with unclean hands. He deposed that the defendant is now taking action against the plaintiff for losses sustained by the company as a direct consequence of the plaintiff’s lodgment of caveat on the defendant’s entire land holdings. He stated that it is now not seriously disputed that the value of the property owned by the defendant would be in the region of millions of dollars. The property is unencumbered and has lain idle and virtually unused because of this litigation and the various caveats lodged by the plaintiff. Mr. Akhil deposed that he is well aware of the plaintiff’s resources and stated that the plaintiff is basically a person of no substantial means. He stated that as a result of the present litigation the defendant has incurred legal costs which have been assessed in the sum of $400,000.00 excluding witnesses travel expenses of at least $50,000.00. He maintained that the plaintiff having abandoned any claim to the property and having failed in his bid for damages, the order that the plaintiff re-convey the property to the defendant should be immediately enforced. In relation to the order for costs he stated that the plaintiff should lodge a bond in Court in the sum of $300,000.00 and provide an undertaking that he will diligently proceed with his appeal.

Background

[4] The background facts of this case are contained in my judgment of 9 May 2008 and need not be repeated here. However for the purposes of this ruling, of significance is that the plaintiff in his 2nd amended statement of claim did not plead the remedy of specific performance in respect of any of the three agreements which were the subject matter of the dispute between the parties. Whilst he maintained that the defendant breached the terms of all three agreements and also alleged fraudulent conduct on the part of the defendant’s officers in respect of all agreements, the remedy he sought was in damages only. He maintained that he was entitled to an order that Certificate of Title number 34778 be deposited into Court as a form of security for any damages which may be ordered in his favour.

The relevant principles on a stay application

[5] The relevant principles for consideration on applications for stay pending appeal were enunciated by the Fiji Court of Appeal in Natural Waters of Viti Ltd –v- Crystal Clear Mineral (Fiji Ltd)[1]. The court held as follows:

"The principles to be applied on an application for stay pending appeal are conveniently summarized in the New Zealand text, McGechan on Procedure (2005):

‘On a stay application the Court’s task is ‘carefully to weigh all of the factors in the balance between the right of

a successful litigant to have the fruits of a judgment and the need to preserve the position in case the appeal is successful’: Duncan –v- Osborne Building Ltd (1992) 6 PRNZ 85 (CA), at p.87.

The following non-comprehensive list of factors conventionally taken into account by a Court in considering a stay emerge from Dymocks Franchise Systems (NSW) Pty Ltd –v- Bilgola Enterprises Ltd (1999) 13 PRNZ 48, at p.50 and Area One Consortium Ltd –v- Treaty of Waitangi Fisheries Commission (1993) 7 PRNZ 200:

1. Whether, if no stay is granted, the applicant’s right of appeal will be rendered nugatory (this is not determinative). See Phillip Morris (NZ) Ltd –v- Ligget & Myers Tobacco Co (NZ) Ltd [1977] 2 NZLR 41 (CA)
   
2. Whether the successful party will be injuriously affected by the stay
   

100. The bona fides of the applicants as to the prosecution of the appeal.
     

4. The effect on third parties
   
5. The novelty and importance of questions involved
   
6. The public interest in the proceeding
   
7. The overall balance of convenience and the status quo.
   

[6] I comment briefly on such of those factors as may be relevant in the present case.

Whether, if no stay is granted, the applicant’s right of appeal will be rendered nugatory

[7] The Court of Appeal held that this was not determinative. The onus is on the plaintiff/applicant to show that if the stay is not granted the appeal will be rendered nugatory. There is no credible evidence before me to suggest how the plaintiff’s pending appeal will be rendered nugatory. Mr. Sharma stated that substantial losses will accrue to him. He failed to disclose how this was so given that aside costs which he has been ordered to pay, his claim for damages was dismissed. The defendant was not awarded a monetary judgment in its favour. The defendant was successful on its counter-claim and an order was made that the plaintiff re-convey the property comprised in Certificate of Title 34778 being Lot 1 on DP8041 to the defendant. The plaintiff maintained in his pleadings and throughout the hearing that he made no claim to this property. All he wanted was substantial damages for alleged breach of contract(s). He now says that he has instructed his solicitors to further amend his statement of claim in the Fiji Court of Appeal to ask for specific performance. In my view, this an afterthought because he now recognizes that his own failure to comply with the terms of the agreements rendered his case for damages unsustainable. I have upheld the defendant’s submission that if a stay is not granted the plaintiff’s right of appeal will not be rendered nugatory.

Whether the successful party will be injuriously affected by the stay

[8] Clearly the defendant will be adversely affected if the stay order is given. It has been deprived of the full use of its property for several years now because of this litigation and various caveats lodged by the plaintiff. It ought not be subject to the restraints which prevented it from dealing with its property. The potential for continuing financial losses will continue to accrue so long as the defendant is kept out of dealing with its properties as it is entitled in law to do. I also have serious concerns about the plaintiff’s ability to meet taxed costs as and when they fall due. Costs to the defendant will be substantial given the number of contested interlocutory applications that have characterized these proceedings from the outset.

The bona fides of the applicants as to the prosecution of the appeal

[9] Although it is not desirable to assess the merits of the grounds of appeal, prima facie it is apparent that the appeal is arguable and is neither wholly unmeritorious nor wholly unlikely to succeed. However the indication from the plaintiff that it will seek to amend its pleadings before the Court of Appeal has raised doubts in my mind as to the genuiness of the plaintiff’s prosecution of its appeal in the form presently before me.

The overall balance of convenience and the status quo

[10] The test here is a determination of which of the two parties would suffer greater harm from granting or refusal of a stay pending a determination of the appeal on merits. A balancing of conflicting considerations is required, between the underlying principle that a litigant is entitled to the fruits of his judgment forthwith and the obvious injustice in refusing a stay where such a refusal will render the appeal nugatory or substantially nugatory.[2] In my consideration I have no hesitation in concluding if the application for stay is refused the plaintiff will not suffer irreparable harm. There is no credible evidence of this before me in any event. There is no appreciable risk that if the stay is refused the appeal will be rendered nugatory or substantially so. The order that the plaintiff re-convey to the defendant the property contained in Certificate of Title 34778 was made on the basis of the pleadings, evidence and law considered in arriving at my judgment. A mere averment by the plaintiff that he proposes a further application to amend his pleadings before the Court of Appeal carries little weight in so far as determination of this application is concerned as I am bound only to consider the pleadings before me.

Conclusion

[11] In my view the defendant will suffer a greater prejudice (if the application is granted) than the plaintiff (if the application is not granted). I am satisfied that the plaintiff’s appeal will not be rendered nugatory or substantially so if a stay is not granted. In arriving at this conclusion, I have borne in mind what was said in Wilson v Church [1879] UKLawRpCh 169; (1879) 11 ChD 576 CA quoted by Sir Moti Tikaram in Reddy’s Enterprises:

"Where an unsuccessful party is exercising an unrestricted right of appeal, it is the duty of the court in ordinary cases to make such orders for staying proceedings under a judgment appealed from, as would prevent the appeal, if successful, from being nugatory. But the court will not interfere if the appeal appears not to be bona fide, or there are other sufficient exceptional circumstances."

[12] I have also borne in mind the general rule that the Court does not "make a practice of depriving a successful litigant of the fruits of litigation, and locking up funds to which prima facie he is entitled" pending appeal. (The Annot Lyle [1886] UKLawRpPro 31; (1886) 11 PD, 114, 116 CA; Monk v Bertram [1891] UKLawRpKQB 15; (1891) 1 QB, 346).

[13] As for prayers (b) and (c) of the summons, all that need be said is that the plaintiff failed to establish the legal basis for the relief sought. The plaintiff is entitled to the transcript of the record of proceedings once the same has been prepared. His application that he is also entitled to copies of all the recorded tapes is misconceived. There are no justifiable reasons why an order should be made directing the Deputy Registrar of the High Court at Lautoka to release the transcripts or tapes within 14 days. Compilation of the transcript will follow the normal process.

Order

The summons issued 14 May 2008 is dismissed with costs to the defendant assessed in the sum of $550.00.

G. Phillips
Judge

At Lautoka
20 June 2008

---

^[1] FCA Civil Appeal No. ABU 0011 of 2004S (18 March 2005) page 3
^[2] Reddy Enterprises Ltd v The Governor of the Reserve Bank of Fiji [Court of Appeal, 1991 (Tikaram
RJA) 9 of August