Sharma v Sharma [2011] FJHC 448; Civil Appeal 34.2011 (18 August 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL APPEAL NO. 34 OF 2011
(Nausori Magistrates Court No. 106 of 2009)

BETWEEN:

PRAVIN CHAND SHARMA
First Appellant

AND:

JAGDISH CHAND SHARMA
Second Appellant

AND:

HEMENDRA KUMAR SHARMA
Respondent

Mr A. Rayawa for the Appellants
Mr S Kumar for the Respondent

DECISION

This is an application for a stay of execution pending appeal from the decision of Resident Magistrate Naivalu delivered on 18 February 2011. The application was made by Motion dated 9 March 2011 and supported by an affidavit sworn by Pravin Chand Sharma (the First Appellant) on 9 March 2011. Pursuant to orders made by this Court the Respondent filed an answering affidavit sworn by Hemendra Kumar Sharma (the Respondent) on 5 April 2011. The Appellants filed a reply affidavit sworn by Pravin Chand Sharma on 20 May 2011.

The application for a stay was heard on 22 June 2011. Prior to that date interim orders had been made to preserve the status quo pending the Court's decision on the stay application. The parties appeared before me again on 24 June 2011 to clarify outstanding issues arising out of the contents of the Notice of Appeal and one of the affidavits.

The starting point for determining the application is the decision of the Agricultural Tribunal dated 24 November 2010. The Tribunal ordered the Director of Lands to issue an Instrument of Tenancy with effect from 1 January 2001 over certain land in favour of the Respondent in preference to the Appellants. At the time that the Respondent's application came before the Tribunal, the Appellants were residing on the land.

By notice of motion dated 15 January 2011 and filed in the Magistrates Court at Nausori on 17 January 2011 the Respondent sought amongst other things, an injunction that the Appellants be restrained "from occupying or damaging any property and or removing any items whether building or otherwise" situated or contained on the said land. The application was supported by an affidavit sworn by the Respondent on 15 January 2011. The documents were served on 18 January 2011 by the Respondent on the Appellants by personally delivering them to the office of their legal practitioners at Waimanu Road, Suva.

The Appellants did not attend court and were not represented when the application was called on 21 January 2011. The Resident Magistrate made default orders in the following terms:

" ...... that the (Appellants) whether by itself, its servants and/or agents be injuncted and restrained from occupying or damaging any property and/or removing any terms whether building or otherwise situated and or contained (on the said land) and also the Defendants be ordered to pay a sum of $24,000.00 as security for costs of defending this action."

The said land was described as being Lot 1 R 1960 Koroqaqa and contained in LD 4/14/1490 CL 9707 being an area of 10 acres. The Respondent had commenced proceedings by way of a Writ of Summons issued out of the Magistrates Court at Nausori on 8 December 2009 against the Appellants. In the Writ the Respondent claimed damages of $48,000.000 with a further claim for general damages.

Then by motion dated 26 January 2011 the Appellants applied to the learned Magistrate for, amongst other things, an order that the injunction be set aside and the order for security for costs also be set aside or stayed. The application came before the learned Resident Magistrate on 2 February 2011.

As the learned Magistrate noted the Respondent wanted to enter and take possession of the property while the appellants wanted to remain and were claiming that they have a bona fide interest to remain so even though the subject lease had been declared as above in favour of the Respondent.

The learned Magistrate declined to set aside the orders he had made on 21 January 2011. He dismissed the application to set aside the injunction. He refused to grant a stay of his orders. He ordered the Appellants to pay costs fixed in the sum of $400.00. He granted the Appellants 28 days to appeal. His written decision was dated 18 February, 2011.

The Appellants then filed and served a Notice of Intention to Appeal dated 24 February 2011. The Appellants challenge the Ruling of the learned Magistrate dated 18 February 2011 on the following grounds:

"1. The learned Magistrate erred in law in categorizing the Appellants as an interested party with no locus standi as stipulated under section 48 of the Agricultural Landlord and Tenant Act Cap 270.

2. The learned Magistrate erred in law in misconstruing the application of section 48 of the Agricultural Landlord and Tenant Act Cap 270.

3. The learned Magistrate erred in law in presiding over matters of trespass to land and for recovery of land between the Appellant and the Director of Lands who previously had a tenancy agreement, therefore falling outside of the jurisdiction stipulated in the Magistrates' Court (Civil Jurisdiction) Decree 1988.

4. The learned Magistrate erred in law in failing to consider relevant factors but took into account irrelevant considerations from a cursory examination of the facts stipulated in the Agricultural Tribunal Ruling which had deprived the Appellants audi alteram partem or a right to be heard".

The question before me is whether a stay of execution of the ex parte orders made on 21 January 2011 and confirmed on 18 February 2011 after an inter partes hearing should be granted. What was before the learned Magistrate on 2 February 2011 were applications to set aside (a) an injunction granted on 21 January 2011 in default of appearance at the hearing and (b) an order that security for costs in the sum of $24,000.00 also made on the same day in default of appearance.

The jurisdiction to hear the Appellants' applications on 2 February 2011 was vested in the learned Magistrate by virtue of the fact that the initial hearing on 21 January 2011 had proceeded as an ex parte hearing. His Lordship was satisfied as to service and that the Appellants had been given sufficient notice of the proceedings. The power to set aside an ex parte order is given under Order XXVI Rule 11 and/or under Order XXX Rule 5. What the learned Magistrate was not required to do on that day was to consider the merits of any appeal that may be pending from the decision of the Agricultural Tribunal.

The jurisdiction of the learned Magistrate to grant injunctive relief was derived from section 16 (1) (f) of the Magistrates Court Act Cap 14 (as amended) which states:

"(i) A resident Magistrate shall, in addition to any Jurisdiction _ _ _ have and exercise in civil causes:-

(f) to grant in any suit instituted in the court injunctions _ _ _"

Since the Respondent had commenced a cause of action for damages, it was open to the Magistrate to adjudicate on an application by motion for an injunction.

The jurisdiction to grant an order for security for costs is set out in Order XXX III Rule 4 states:

"(i) Where a plaintiff does not, or does not ordinarily reside in Fiji, the Court may, either on its own motion or on his application of any defendant, require any plaintiff in any suit, either at the commencement or at any time during the progress thereof, to give security for costs, to the satisfaction of the court by deposit or otherwise, a to give further or better security."

In the proceedings before the learned Magistrate the Appellants were joined as Defendants and as a result Order XXX III Rule 4 does not provide a basis for the decision to order security for costs against the Appellants.

It would appear that the Respondent, if not the learned Magistrate, relied on Order XX I Rule 1 of the Magistrates Courts Rules. However that was not the basis upon which the application had been made in the Motion dated 15 January 2011. The Respondent had sought an order that the Appellants be ordered to pay a sum of $24,000.00 as security for costs of defending the action. The action was the proceedings commenced by the Respondent by Writ in December 2009. There is no reference in the motion for an order in the terms contemplated by order XX I Rule 1. Furthermore, the affidavit in support of the motion does not depose sufficiently to any of the material facts that are required to be established in order to obtain an order under Order XXI Rule 1.

The principles to be applied in an application for stay pending appeal have recently been discussed in the decision of the Supreme Court. In Abbay Kumar Singh –v- Chief Registrar (unreported civil appeal No. CBV 7 of 2010 delivered 21 October, 2010) and Stephen Patrick Ward –v- Yogesh Chandra (unreported civil appeal No. CBV 10 of 2010 delivered 20 April 2011) the Supreme Court referred with approval to the decision of the Court of Appeal in Natural Waters of Viti Ltd –v- Crystal Clear Mineral Water (Fiji) Ltd (unreported civil appeal No. ABU 11 of 2004 delivered 18 March 2005). In general terms the Court is required to consider (a) whether the Appellants' right of appeal will be rendered nugatory if a stay is not granted, (b) whether the successful party will be injuriously affected by the stay, (c) whether the Appellants are bona fide as to the prosecution of the appeal, (d) the effect on other parties, (e) the novelty and importance of questions involved, (f) the public interest in the proceeding and (g) the overall balance of convenience and the status quo. These are all matters to be considered in determining whether the Appellants" circumstances are sufficiently exceptional for the granting of stay relief pending appeal.

However, I also consider that the decision of Marshall JA in Attorney-General of Fiji and Minister of Health –v- Loraine Die (unreported Misc. No 13 of 2010 delivered 17 February 2011) provides additional guidance for determining whether to grant stay relief pending appeal. In that Ruling Marshall JA referred to a passage from Volume 1 of Hong Kong Civil Procedure 2007. The relevant quotation appears on page 9 at paragraph 24. I intend to refer to only a brief portion from the extract that his Lordship had quoted:

"The most important consideration in respect of whether a stay of execution should be granted is whether there are strong grounds of the proposed appeal:_ _ _ That hurdle is higher than that of chances of success for considering whether leave to appeal should be granted."

For the reasons already stated I have concluded that a stay should be granted in respect of the learned Magistrate's decision to order security for costs in the sum of $24,000.00.

In my judgment, so far as this aspect of the appeal is concerned, the grounds are strong. The learned Magistrate has ordered that the Appellants pay a sum of $24,000.00 as security for costs of defending the action (See Order made on 21 January and entered on 24 January 2011). There are strong grounds for challenging this order on the basis that Order XXX III Rule 4 has no application to a Defendant. There are also strong grounds for concluding that the material before the learned Magistrate did not establish the basis for an order to be made under Order XXI Rules 1 and 2 of the Magistrates' Courts Rules.

However, in my judgment a stay in respect of the injunctive relief is not supported by the material before the Court. The Appellants have not established exceptional circumstances to grant stay relief pending appeal.

If the appeal is ultimately successful, the Appellants can return to the said land and can claim in respect of any loss or damage suffered. The important issue is that the Respondent is the successful party who has been waiting since 1 January 2011 to occupy the said land in accordance with the decision of the Agricultural Tribunal. The injunctive relief granted by the learned Magistrate on 21 January 2011 and confirmed by the same learned Magistrate on 18th February 2011 is intended to give effect to that decision. I am not satisfied that the grounds of appeal on this point are strong enough to require an assessment of the remaining matters to which reference was made by the Court of Appeal in the Natural Waters of Viti Ltd case (supra).

As a result I order that a stay be granted in relation to the order to pay security for costs in the sum of $24,000.00, otherwise the application is dismissed. As both parties have been partially successful, there will be no orders as to costs. The Respondent is ordered to permit the Appellants to remove their livestock and property from the said land. The Appellants are to be permitted to return to the said land for the purpose of harvesting any crops planted by them on the said land.

W D Calanchini
JUDGE

18 August 2011
At Suva