Avon Investments Ltd v Prime Time Properties Ltd [2011] FJHC 583; HBC182.2011 (2 September 2011)

IN THE HIGH COURT OF FIJI ISLANDS
AT SUVA
CIVIL JURISDICTION

Civil Action No: HBC 182 OF 2011

BETWEEN:

AVON INVESTMENTS LIMITED
[Plaintiff]

AND:

PRIMETIME PROPERTIES LIMITED
[Defendant]

Counsel: Mr. P. Nayare for the Plaintiff.
Mr. G. O'Driscoll for the Defendant.

Date of Judgment: 2nd September 2011

INTERLOCUTORY JUDGMENT

1. The plaintiff filed inter-partes motion seeking following relief:
   
   1. An Order restraining the defendants by themselves and/or through their servants, agents or otherwise howsoever from serving the plaintiff with the 'Notice to Vacate' the rented premises;
      
   2. An Order restraining the defendants by themselves and/or through their servants, agents or otherwise howsoever from relying on the proposed month to month rental or their letter dated 8.7.2011 pending full settlement of the matter; and,
      
   100. Any further orders that the Court deems just and necessary.
        
2. In support of the motion an affidavit was filed by Takeshor Pal one of the directors of the plaintiffs' company.
   

Background of the Case

3. The plaintiff is a registered limited liability company having its registered office in Suva.
   
4. The defendant is an overseas lease company having its business with the plaintiff carried out by its local agent N. Mudaliar & Co.
   
5. In the affidavit, it is stated that the defendant by a letter dated 8.7.2011 sent to the plaintiffs' company stating that unless a Court Order is served on their office and failing to pay rental in the sum of FJ $ 7,475.00, the defendant shall terminate the enforced month to month rental agreement.
   
6. It is stated that the proposed rental increase is tantamount to economic duress and very prejudicial to the plaintiff.
   
7. A copy the defendant's letter marked as "A" is annexed to the affidavit.
   
8. In that letter, the defendant clearly states that failure to comply with its new proposed terms will result in the plaintiffs being served with a notice to vacate the premises by 12.08.2011.
   
9. It is further deposed that there exists an agreement between the parties and the proposed rental increment is contrary to existing agreement and to the law of contract.
   
10. Furthermore, the deponent states that there is a fixed amount of $ 5625.00 agreed by both parties, which is to be continued in the remaining tenure of 3 years, which is due to expire sometime in 2012. The defendant is refusing to receive the current rental of $ 5625.00 when paid by the plaintiff, and the amount $ 7475.00 is demanded by the defendant in breach of the current agreement between the parties.
    
11. It is further stated that the defendant's attempt to remove the plaintiff is an unfair.
    
12. In response to the plaintiff's affidavit, an affidavit was filed by Renuka Jamnadas, one of the directors of the defendant company.
    
13. In the affidavit, it is stated that there had been no duress exerted on the plaintiff by the defendant and the proposed rental increase is not prejudicial to the plaintiff company.
    
14. It is further stated that the defendant company made an assessment of the rental based on prevailing market forces, the initial rental had been agreed at $ 4500.00 plus VAT per month from 1.1.2007, but due to representations made by the plaintiff the rental had been $ 2500.00 until 1.1.2010, when it was raised to $5000.00 plus VAT per month.
    
15. It is further stated that the rental increase to $ 6500.00 plus VAT per month was notified to the plaintiff in a letter dated 17.5.2011.
    
16. In response to the leasing arrangements between the parties, the defendant's states that the plaintiff has been a monthly tenant of the defendant from 1.1.2007 since the plaintiff had not complied with certain conditions of the defendants.
    
17. The defendant admits that the Notice to Vacate has been sent to the plaintiff company giving one month notice to vacate.
    
18. It is further deposed that there was no three year term of agreement and the plaintiff is a month to month tenant of the defendant.
    
19. The plaintiff filed its affidavit in reply. It is stated that the defendant company is using an unjustified claim for a security grill with no supporting documents; the defendant cannot claim $ 15,000.00 for a security grill without showing proper documents as its value, the defendant, although conducted its assessment, no such findings were made known to the plaintiff.
    
20. It is further stated that there is an existing agreement which can also be determined from the conduct and communication of the parties and the movements of consideration from the plaintiff to the defendant. The plaintiff has also made a security deposit.
    
21. The plaintiff has filed a supplementary affidavit without obtaining the leave of the court and the defendant objected to that. Hence, I disregard the supplementary affidavit.
    
22. The principles to be followed in considering the granting of injunctions are set out in the leading case of American Cyanamid Co. v. Ethicon Ltd (1975) 1 ALL ER 509
    
23. The 3 matters to which the court must address itself in respect of the present application are, per American Cyanamid are:
    
    1. Is there a serious question to be tried
    2. Would the damage be an adequate remedy
    3. If not, where does the balance of convenience lie
       
24. The House of Lords decided that in all cases, the court must determine the matter on a balance of convenience.
    
25. In that case Lord Diplock stated the object of the interlocutory injunction as follows:
    

"..The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial; but the plaintiff's need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated under the plaintiff's undertaking in damages if the uncertainty were resolved in the defendant's favour at the trial. The court must weigh one need against another and determine where the balance of convenience lies.

26. In Hubbard & Another v. Vosper & another (1972) 2 WLR 389 Lord Denning gave some important guidelines on the principles for granting an injunction, where he said:
    

"In considering whether to grant an interlocutory injunction, the right course for a judge is to look at the whole case. He must regard not only to the strength of the claim but also to the strength of the defence, and then, decide what is best to be done. Sometimes it is best to grant an injunction so as to maintain the status quo until the trial. At other times, it is best not to impose a restrain upon the defendant, but leave him free to go ahead. For instance, in Fraser v. Evans (1969) 1 QB 349, although the plaintiff owned the copyright, we did not grant an injunction, because the defendant might have a defence of fair dealing. The remedy by interlocutory injunction is so useful that it should be kept flexible and discretionary. It must not be made the subject of strict rule."

27. In Hounslow London Borough Council v. Twickenham Garden Development [1971] Ch 233 Megary J stated as follows:
    

"Equity will not assist a man to break his contract. Here, the Borough is in effect, saying to the court, you should grant an injunction to evict the contractor even if in so doing, you would be helping me to break my contract. I do not think it does not matter whether or not he is breaking his contract than one is avowedly doing so."

28. In considering whether damage would be an adequate remedy, I would highlight the following paragraph by Lord Diplock in American Cyanamid v. Ethicon Ltd [1975] 1 ALL ER 510.
    

"As to that, the governing principle is that the court should first consider whether if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant's continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages in the measure recoverable at common law would be adequate remedy and the second defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted however strong the plaintiff's claim appeared to be at that stage".

29. As to balance of convenience the court should first consider whether if the plaintiff succeeds at the trial, they would be adequately compensated by damages for any loss caused by the refusal to grant an interlocutory injunction.
    
30. It is with these legal principles in mind I consider the plaintiff's application.

Is there a serious question to be tried?

31. The defendant's contention is that the plaintiff is occupying the property on a month to month rent basis. However, the plaintiff states that there exists an agreement between the parties that contradicts the proposed rental increase by the defendant, but the plaintiff has not even annexed a copy of the said agreement to its affidavit in support nor has any document been tendered contrary to what the defendant has stated.
    
32. Hence, in the absence of any formal lease agreement, the plaintiff has to be treated as a monthly tenant. Since the plaintiff has been in occupation of the said property on a monthly rental basis, the defendant was required to give only one month notice to the plaintiff when the latter is asked to vacate the property.
    
33. It is also important to note that merely because a Notice to Vacate is served on the plaintiff by the defendant it does not cause any damage to the plaintiff because the plaintiff can always challenge the merit of the defendant's demand. In my view, a serving of a Notice to vacate is the first step that a landlord could take in exercising his right to evict a tenant. The defendant as a landlord has a right to serve a Notice to Vacate. What the plaintiff seeks is to restrain the defendant from serving the plaintiff with a Notice to vacate the rented premises. In other words, the plaintiff seeks Court's indulgence to restrain the defendant from exercising his legal right as the landlord, which in my view cannot be done by way of an injunction.
    
34. Furthermore, the 2nd relief sought by the plaintiff, if granted, would again curtail the defendant's right to decide what it must apply for. This is a matter where parties are at variance and it is, in fact, in dispute. Court, in granting an interlocutory injunction, would always endeavour to preserve an existing right but not a right that might accrue to the plaintiff after full trial into the matter.
    
35. For the reasons expressed in my factual findings, I find there is no serious question to be tried. There is little merit in the plaintiff's case. I find that the issues raised by the plaintiff have no substance in fact or in law.
    

Would damage be an adequate remedy?

36. It is well settled law that injunction shall not be granted if a party seeking the injunction can be adequately compensated in damages for loss caused by the refusal to grant an injunction.
    
37. In considering the above issue, I would highlight the following passage by Lord Diplock in American Cyanamid v. Ethicon Ltd [1975] 1 ALL ER 510, which is of much assistance to this case.
    

"As to that, the governing principle is that the court should first consider whether if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant's continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages in the measure recoverable at common law would be adequate remedy and the second defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted however strong the plaintiff's claim appeared to be at that stage".

38. In its affidavit in support, the plaintiff has never stated even the nature of its business carried out in the defendant's property. However, in the affidavit in reply filed by the plaintiff, it is deposed that the plaintiff was running a restaurant on the defendant's property, but it is not stated the extent of the business.
    
39. More importantly, it is not stated what damage would be caused to the plaintiff if the injunction is not granted.
    
40. In an application of this nature, it is an indispensable requirement that the plaintiff must show that an irreparable and irremediable damage would be caused to the plaintiff if the injunction is not granted but in the present case the plaintiff has failed to convince the court on that aspect. Therefore, it is my view that damages would be an adequate remedy in this case.
    
41. Even if it is assumed that there exist a serious issue to be tried, when the nature of the relief sought by the plaintiff is considered, it appears to this court that no irreparable damage or any prejudice would be caused to the plaintiff if the restraining orders are not granted. It must be further stated that the plaintiff could be adequately compensated with damages if the court decides in favour of the plaintiff at the hearing of the substantive case.
    
42. Since the plaintiff has failed to satisfy the first two requirements as per American Cyanamid case, it is not necessary to proceed any further to consider the issue of balance of convenience.
    
43. On the above premise, I dismiss the plaintiff's inter-partes Notice of Motion.
    
44. Cost is summarily assessed in the sum of $ 500.00.
    

Pradeep Hettiarachchi

JUDGE

02.09.11