Khan Buses Ltd v Janardhan [2011] FJHC 295; HBC247.2010L (24 May 2011)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 247 of 2010L

BETWEEN :

KHAN BUSES LIMITED
Plaintiff

AND:

JANARDHAN
Defendant

INTERLOCUTORY JUDGMENT

Judgment of: Inoke J.

Counsel Appearing: Ms N. Khan for the Plaintiffs.
Mr Suresh Maharaj for the Defendant.

Solicitors: Natasha Khan Associates for the Plaintiffs.
Suresh Maharaj & Associates for the Defendant.

Dates of Hearing: 11 March 2011

Date of Judgment: 24 May 2011

A INTRODUCTION

[1] On 31 December 2010, I granted the Plaintiff's ex-parte application for an injunction restraining the Defendant from presenting, advertising and publishing a Winding Up Petition after the Defendant presented a statutory demand to the Plaintiff for $294,369.37 on 10 December 2010.

[2] The application was made under O 29 r 1 of the High Court Rules 1988. The grounds for the application were that the debt was not owed and that the Plaintiff was likely to suffer irreparable harm if the Petition was allowed to be advertised. I accept the grounds as submitted and gave directions for the service and filing of affidavits and for the matter to be heard inter-partes as to whether the injunction was to be continued. This is my judgment following that hearing on 11 March 2011.

B THE ORIGINATING PROCEEDINGS

[3] This action was commenced by Originating Summons seeking the following orders:

1. An order restraining the Defendant and/or its agents and/or servants from in any (way) presenting, advertising, publishing a winding up petition pursuant to statutory demand notice dated 10 December 2010 and from in any way taking any further winding up proceedings against the Plaintiff, Khan Buses Limited.
   
2. A declaration that the alleged debt as per the demand notice dated 10 December 2010 is not payable by Khan Buses Limited, or, alternatively is disputed.
   
3. A declaration that any winding up proceedings arising out of the alleged purported debt is an abuse of process of this honourable court.
   

[4] The summons was supported by the affidavit of Nasra Khan who is a director of the Plaintiff.

C CASE HISTORY

[5] This has been an ongoing dispute which arose out of a sale and purchase agreement entered into on 11 September 1995 in which the Defendant, Janardhan, agreed to sell his Crown Lease to the Plaintiff for $170,000. The agreement was initially between one of the directors of the Plaintiff and Janardhan but the director later transferred his interest in the agreement to the Plaintiff. A dispute arose between the parties which led to Janardhan suing Khan Buses Limited and others in civil action HBC 358 of 2004L, claiming damages for breach of the agreement and a declaration that the agreement had been validly rescinded and the deposit and other monies paid thereunder ($99,300) be forfeited to him. Khan Buses counter-claimed against Janardhan for specific performance and damages. On 7 November 2005, Coventry J allowed Janardhan's claim in HBC 358 of 2004L and dismissed Khan Buses counter-claim. Khan Buses appealed and the Court of Appeal in civil appeal ABU 122 of 2005S and the Court of Appeal in a judgment delivered exactly three years later on 7 November 2008 allowed the appeal and ordered Janardhan "to take all necessary steps required of him to bring about settlement of the sale and purchase agreement of 11 September 1995, such settlement to take place within 90 days of the date of the handing down of this judgment". The Court of Appeal also ordered Khan Buses to pay Janardhan "compound interest at the rate of 10% per annum on the sum of $70,700 from 8 December 1995 until the date of settlement of the sale and purchase agreement dated 11 September 1995."

[6] Janardhan then obtained a stay of the Court of Appeal judgment pending his appeal to the Supreme Court. On 27 August 2010, the Supreme Court dismissed his appeal on the grounds that it was not an appeal of general importance.

[7] Following the Supreme Court decision, Janardhan's solicitors contacted Khan's Buses solicitors for settlement of the sale and purchase agreement. Janardhan's solicitors calculated the amount due for settlement on 30 September 2010 was $290,275. The solicitors for Khan Buses replied that according to their calculations settlement was to be 90 days from the date of the Supreme Court judgment because the Court of Appeal judgment was stayed, which fell on 25 November 2010.

[8] Whilst the court cases were being pursued, Khan Buses got itself registered as the lessee of the land in question on 4 May 2009 which land had by now changed from an agricultural (sugar cane farm) lease to an industrial lease. How it came to be the lessee was described by Janardhan's counsel as "dubious means". He said his client had been given a copy of a letter from the Department of Lands on 18 February 1994, that his lease would be extended for a further 20 years from 1 January 1996. Instead, the Director of Lands issued and registered an industrial lease to Khan Buses for 99 years from 1 January 1996.

PLAINTIFF'S ARGUMENT

[9] Khan Buses' application and originating summons rested on one main point. Its counsel argued that because Janardhan could not deliver title, because it is now held by her client, Janardhan was not in a position to settle, therefore he could not specifically perform the sale & purchase agreement. Because Janardhan could not perform the agreement, he was therefore not entitled to any payment and it followed that no debt was owed by Khan Buses to ground the statutory demand against the company.

CONSIDERATION OF THE ARGUMENT

[10] In my opinion, the argument totally ignores the reality of the situation. Khan Buses sought specific performance of the agreement for Janardhan to sell the land in question to it. The Court of Appeal granted what it wanted. Khan Buses, by some "dubious means" got itself registered as the lessee of the very same land. It got exactly what it wanted. I do not think that Khan Buses can avoid paying for what it wanted and the Court of Appeal granted on 7 November 2008.

[11] The only matter that can be disputed is the amount which is to be paid under the agreement. I therefore think there is no proper basis for stopping Janardhan from proceeding with winding up proceedings in which proceedings the question of quantum can be determined.

[12] I therefore dissolve the interim injunction granted on 31 December 2010.

[13] Janardhan has filed an application to strike out the Khan Buses originating summons and I will set that down for hearing.

COSTS

[14] The normal rule applies and I order the Plaintiff to pay the Defendant's costs of this application of $1500 within 21 days.

ORDERS

[15] The orders are:

• (a) The Plaintiff's ex-parte motion filed on 31 December 2010 is dismissed.
  
• (b) The interim injunction granted on 31 December 2010 is dissolved forthwith
  
• (c) The Plaintiff shall pay the Defendant's costs of $1500 within 21 days.
  

............................................................
Sosefo Inoke
Judge