Mudgway v Hannan [2011] FJHC 285; HBC029.2011L (23 May 2011)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No HBC 029 of 2011L

BETWEEN:

CRAIG MUDGWAY of 31 The Cove, Denarau Island
Plaintiff

AND:

BRENDAN HANNAN of the Anchorage Beach Resort, Vuda Point Rd, Vuda
Defendant

Appearances:
Ms. Vanua for the Plaintiff
Mr. Young for the Defendant
Parties agreed to Order on written Submissions on 11/4/2011.
Order delivered on 23/5/2011.

ORDER

1. By his EX PARTE NOTICE OF MOTION filed on the 11th March 2011 which was later converted to an INTER PARTE NOTICE OF MOTION on the same day the Plaintiff seeks the following order;
   

"1. An order that the plaintiff by its lawyers, servants, employees or agents may not settle the contract of sale between the plaintiff and defendant dated 16 September 2010(referred to as the First Contract and the Second Contract respectively in the Statement of Claim filed herein) or take any action or do anything to be registered as registered proprietor of the land known as 31 the Cove Denarau Island being lot 31 in deposit plan 8880 and being all that piece and parcel of land in certificate of title 3497."

The said certificate of Title should read as 34907 and not 3497, another of many such typographical errors in this case

Though on the face of the Motion the application is said to be made pursuant to Order 8 Rule 2 of the High Court Rules on being pointed out by Court and on being converted to an Inter parte motion it was amended to read as an application pursuant to Order 29 of the High Court Rules in open Court in the presence of the Defendants Counsel. This action in which this Motion was filed was filed by way of Writ of Summons on the same day of 11th March 2011. It is that Inter parte Notice of Motion seeking the above relief, which is before Court for order.

2. In his Statement of Claim the Plaintiff seeks the following relief's;
   
   1. A Declaration that the First Contract and Second Contract are voidable and void;
      
   2. An order that the defendant, his agents or nominee be enjoined from taking title to the Property or proceeding to complete either the First Contract or the Second Contract;
      
   100. (B)Damages for assault;
        
   4. (C)Interest pursuant to section 3 of the Law Reform (Miscellaneous Provisions) (Death and interest ) Act [Cap27] from 24 December 2009 until payment
      
   5. (D)Costs on solicitor/client basis; and
      
   6. (E)Such further or other orders as the Court in the circumstances considers appropriate
      

The Plaintiff alleges that the Second Contract (on the 5th October 2010) was entered into as a "result of threats, duress and coercion of the defendant and his agents".

3. In issuing an order ex parte prior to a trial or hearing the Court needs to exercise caution as the order would interfere with the status of the parties and the natural course of events, without the Court being in a position to test the evidence and hear all parties. When such orders are sought inter partes at least the Court is in a position to hear the parties affected. However still the Court needs to be mind full when issuing such orders on affidavit evidence alone as such evidence are at the most evidence in chief without the demeanor of the witness observable and not tested by cross examination. Otherwise Court could pre-judge facts that are best left to be judged at the trial.
   
4. The allegation made by the Plaintiff is no doubt serious. In fairness to the Defendant as well as the Plaintiff a finding should not be made on such allegations at this stage of the case. Therefore for the limited purpose of this current application this Court will consider whether a restraining order as sought ought to issue on the assumption and an assumption only (not a finding) that the allegations of threats, duress and coercion are true. If be the case still the Plaintiff has to satisfy the good rules and requirements suggested by precedent, before this Court could issue a interim restraining order in the nature of an injunction, as what the Plaintiff is seeking is not an order restraining the Defendant from threatening the Plaintiff or applying duress and coercion on the Plaintiff, as there is no continuation of such threats, duress or coercion alleged.
   
5. This Court however must note that some of the evidence of such threats, duress and coercion are presented in the Plaintiffs affidavit as hearsay and supported by an affidavit of Anita Cranston which does not refer to the specific paragraphs of the Affidavit of the Plaintiff and states at the final paragraph 4 therein that "I confirm I am fearful of the plaintiff and am that his threats were such that Craig Mudgway decided against legal advice to sign the contract for sale on the 5th October 2011 to sell the property...." The Plaintiff is Craig Mudgway, therefore either the said Anita Cranston is fearful of both the Plaintiff and the Defendant or it is a typographical error which neither party appears to have noticed. Be that as it may this Court will now analyze the Plaintiffs relief sought as follows;
   
6. The order sought by the Plaintiff in his Notice of Motion set out above clearly seeks to restrain the Plaintiff, as it seeks; 1. "An order that the plaintiff by its lawyers, servants, employees or agents may not settle the contract of sale between the plaintiff and defendant dated 16 September 2010(referred to as the First Contract and the Second Contract respectively in the Statement of Claim filed herein) or take any action or do anything to be registered as registered proprietor of the land .....". If this Court grants the order as set out in the Notice of Motion THEN IT WOULD AMOUNT TO AN ORDER TO RESTRAIN THE PLAINTIFF SOUGHT BY THE PALINTIFF, which is an order this Court need not issue unless the Plaintiff is in a position unable to restrain himself! The Plaintiff is in New Zealand and the alleged threats, duress and coercion is alleged to have been applied in Fiji, not in New Zealand. In the Plaintiffs written submissions however the Plaintiff seeks at the end a restraining order against the Defendant. The Defendants written submissions proceed on the basis that such order is sought against the Defendant and as such this Court shall yet again assume such to be a typographical error. It is needless to state that such errors ought to be brought to the notice of Court by the respective parties or by their Solicitors or Counsel.
   
7. In AMERICAN CYANAMID Co. v. ETHICON Ltd [1975]1 ALL E.R 504, three requirements were recommended;
   
   1. there should be a serious question to be tried, and
      
   2. damages should not be an adequate remedy, and
      
   100. the balance of convenience should favour issuing of the injunction.
        
8. Whether there is a serious question to be tried; This Court has already observed that irrespective of whether it is true or false what the Plaintiff alleges is no doubt a serious question to be tried, however whether the circumstances warrant a restraining order or not is to be seen.
   
9. Whether damages would be an adequate remedy; The Plaintiff seeks a restraining order to prevent the Defendant from completing the sale. Therefore would damages be a sufficient remedy in the event the sale is completed? The Plaintiff does not swear to any irreparable loss to the Plaintiff in the event the sale is completed and the Defendant is registered as the owner. The Defendant too in his affidavit states at paragraph 4.62 thus;
   
   • (i) Transfer of CERTIFICATE OF Title No.34907 in favour of Fineline Holdings Limited duly executed by the Plaintiff as Transfer has been stamped;
     
   • (ii) All that this (is) required to attend to settlement is for Purchaser to pay the balance purchase price (less outstanding outgoings and levy) in exchange for Discharge of Mortgage No. 703258 and Certificate of Title No. 34907.
     
   • (iii) Discharge of Mortgage No. 703258 and Certificate of Title No.34907 is in the possession of the Mortgagees Solicitors, Messrs. Vasantika Patel.
     

The Defendant further states at paragraph 4.61 of his affidavit thus;

"4.61 Settlement with the Mortgagee was been put on hold due to Notice of Motion in this matter being served on me on Friday 11 March 2011."

On the 16th March 2011 Mr. Kumar Counsel for the Defendant conveyed an undertaking to Court to abide by the 1st relief sought in the Notice of Motion of 11th March 2011 till the determination of that Motion.

10. The Balance of Convenience; On the one hand if the Defendant is not restrained from proceeding to settlement then the Plaintiff will only benefit up to so much that he has agreed to in his Agreement for Sale and Purchase with the "Defendant" (in fact Fineline Holdings Limited ) on 5th October 2010, which agreement and settlement the Plaintiff alleges was signed by him under threat, duress and coercion. On the other hand if the Defendant is restrained the Defendant cannot proceed to settlement with the Mortgagee and be registered as the owner under the contract with the Plaintiff and the Plaintiff may be able to re-negotiate to sell at a different price or terms to be agreed in the absence of threat, duress and coercion. Therefore the difference between the two which is the balance of convenience in this case appears to be financial loss which may be remedied by damages. However the determination of that quantum would be a difficult if not impossible exercise involving a subjective test of the Plaintiff as to how much he would have agreed to in the absence of such alleged threat, duress and coercion and an objective test as to what would be the market value of the property at the time. Therein lays an element of irreparable loss though not urged by the Plaintiff.
    
11. There is also a disadvantage to the Defendant in proceeding with the settlement of 5th October 2010, in that the title obtained would be uncertain and subject to the out come of the trial in this action.
    
12. Therefore the Defendant can, independent of the contract of 5th October 2010, proceed to buy the property at a Mortgagee sale, which would give the Defendant certain title.
    
13. In action No. HBC 110 OF 2010 THIS Court delivered judgment today giving the Mortgagee possession of the property which is the subject matter of this action, and the Defendant or any other party (including Plaintiff ) would be free to purchase at a Mortgagee sale.
    
14. The loss to the Defendant against the Plaintiff would be the loss in the payments already made to the Plaintiff, and what ever in excess if any payable to the Mortgagee over and above what was payable under the Second Contract of 5th October 2010. The damages are more readily ascertainable under such a transaction rather than proceeding with the said Second Contract with its alleged taint of threats, duress and coercion.
    
15. The loss to the Plaintiff against the Defendant under such a transaction outside of the Second Contract, as aforesaid would be nil as he seeks to void the said Second Contract, and does not seek to restrain the Mortgagee and the Defendant entering in to a transaction independently.
    
16. In the event the Court holds after trial that there was no threat, duress or coercion, then the Defendant may in addition seek damages for the loss it had incurred if any, in entering into a purchase directly with the Mortgagee at a Mortgagee sale.
    
17. In the event the Court holds after trial that the Second Contract was tainted with threats, duress or coercion then the Plaintiff would suffer an injustice if in the meantime the Defendant had been permitted to proceed with such a contract not to mention the inconvenience to those who may hold under the said Second Contract, all of which along with the difficulty of assessing damages under such circumstances would amount to irreparable loss or thereabout.
    
18. The balance of convenience too as referred to above is in favour of the issuance of an order restraining the Defendant from completing the Second Contract.
    
19. The next aspect this Court has to consider is the undertaking as to damages. The Plaintiff is resident overseas, and his property in Fiji too is now not within his control, as such this Court is inclined to issue a restraining order only subject to the deposit of security in the sum of F$50,000/=, till further orders of this Court.
    

Orders;

(a) On the Deposit BY the Plaintiff in Court the sum of F$50,000/= AS SECURITY FOR DAMAGES within 14 days of this order and subject to such deposit and failing which the following order to LAPSE and stand dissolved after 14 days; The Defendant by his lawyers, servants, employees or agents shall not settle the contracts of sale between the plaintiff and defendant dated 16th September 2010 referred to as the First Contract and 5th of October 2010 referred to as the Second Contract respectively in the Statement of Claim filed in this action or to be registered as registered proprietor of the land known as 31 the Cove Denarau Island being lot 31 in deposit plan 8880 and being all that piece and parcel of land in certificate of title 34907 pursuant to the said First Contract or Second Contract only, it being expressly and clearly ordered that the Defendant shall not in any way be restrained in being registered as the Owner of the said property by or under any other contract or dealing or settlement whatsoever.

(b) Parties to bear their costs.

Hon. Justice Yohan Fernando.
JUDGE.

High Court of Fiji
At Lautoka
23rd May 2011.