Western Builders Ltd v Pacific Building Solutions Ltd [2010] FJHC 334; HBC140.2010 (15 July 2010)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No HBC 140 of 2010

BETWEEN:

WESTERN BUILDERS LIMITED
a limited liability company duly incorporated under the Companies Act
(Cap 247, Laws of Fiji) and having its registered office at
Koula Road, Varadoli, Ba, P O Box 247, Ba.
Plaintiff

AND:

PACIFIC BUILDING SOLUTIONS LIMITED
a limited liability company having its registered office at
9-12 Nukuwatu Street, Lami, Fiji.
Defendant

ORDER OF THE COURT

Orders made under Order 29, Rule (1) of the High Court Rules (1988) and the inherent jurisdiction of the court;

Mr Ram submits the authority in BW Holdings Ltd -vs- Sinclair Knight case – Civil Appeal ABU0066 of 2007S, suggesting and holding that injunctive relief will lie to prevent the abuse of the process of court but though such injunction was not ultimately issued in that case. Mr Ram also submits the case of Samsen Enterprises Ltd –vs- Macrolend Pty Ltd No 314 of 2008 and FJCH 268, where the court (2008) did issue an interim restraining order preventing the defendant from taking further action to Winding up the plaintiff. Mr Ram further submit case of Suva Container Park Ltd –v- Island Container Sales Leasing Ltd – HBC 444D of 2005S where Pathik J had granted such an injunction.

It appears from the authorities cited that, it is only to prevent an abuse of the process of Court that a restraining order will be granted under such circumstances.

In any event, the plaintiff has to satisfy the condition in the American Cyanamid –vs- Ethicon case as well which I consider;

(1) On the ground whether plaintiff has an arguable case; I find that though the plaintiff appears to have by plaintiff's documents RA-12 admitted a claim of $52,611.72 still the defendant by RA-22 appears to claim an additional sum of $21,940.31 making a sum of $74,552.63 and giving notice under Section 221 of the Companies Act. However, by RA-16 the defendant shows interest to file Writ of Summons to recover the above sum of $74,552.63 and has submitted a Draft of the Writ of Summons. Therefore this amount of $74,552.63 is one that even the defendant has considered as recently as on 2 September 2009 to be a debt recoverable by way of writ of summons and as such, there is a element of dispute admitted by the defendant by so submitting and intending to file writ of summons. Therefore, there is an arguable case it appears on the sum of $74,532.63 at least.

(2) Whether damage is an adequate remedy, I find that if the defendant goes ahead with the advertisement of winding up it will no doubt cause severe damage to the plaintiffs credit worthiness and its business. The plaintiff is in to construction business, which involves and requires credit worthiness and any doubt as to its liquidity even though unfounded could cause lasting damage. Though this damage is not an excuse to issue an injunction, it is realistic and the fact that the defendant has changed direction from an intended application for writ of summons to winding up application within a span of a few months, show that even defendant may be aware how much damage a winding up application could cause the plaintiff.

As such, it appears as if the plaintiff has been held in "terrorem" to submit and pay the amount of $74,552.63, and that would suggest a abuse of the process of court in utilizing the provisions of the company's Act and the process of court to otherwise recover a debt.

(3) On the balance of convenience, I find that, if the defendant is prevented from proceeding with the winding up procedure for a limited period of time and I stress for a limited period of time, very little or no damage would be suffered by the defendant as the plaintiff in its undertaking to damages has disclosed a property at RA-25 and RA-26, that is worth $5 million. On the other hand if the defendant proceeds with the winding up advertisement, that itself would cause irreparable, damage to the plaintiff and the plaintiff company's credit worthiness and standing in the business world.

The balance of convenience lies in favour of the plaintiff as such, however as the exercise of the rights of a party especially available by statute should not be restrained unless for such cause as an anticipated abuse of the process of court, and as far as possible only after inter-parties hearing, but as the defendant may file the winding up case any day as the 21 days in the notice at RA-22 according to Mr Ram counsel for plaintiff submits, has lapsed by yesterday, there is an urgency that unless an order restraining is not issued for a limited period of time until parties are heard inter-parties irreparable damage could be suffered by the plaintiff if the defendant proceeds with the winding up application.

As such, I make the following orders:-

1. that the defendant, its servants and/or agents are restrained for a limited period of one week from today from presenting any winding up petition or taking up any further action pursuant to the winding up notice dated 16 June 2010 against plaintiff, which order is extendable;
   
2. the defendant, its agents and/or servants are further restrained for a period of one week from today from publishing any advertisement of any winding up proceedings against the plaintiff which order too is extendable;
   
3. the aforesaid orders are made subject to the plaintiff undertaking to damages given in plaintiff's documents RA-25 and RA-26 by Lot No. 3 SO 4307 and Lot No. 1 SO 1833, at Raviravi, Ba and BAL, BA 31 respectively, the said property's the plaintiff undertakes not to further encumber or dispose of until the further order of the court.
   

Costs reserved.

The above orders to be served immediately on the defendant and the defendant's solicitor, O'Driscoll & Co within two days of today returnable on 22 July, 2010 at 10.00am.

Mention on 22 July 2010.

Y I Fernando
JUDGE

At Lautoka
15 July 2010