Ernster v Denarau Corporation Ltd [2012] FJHC 1005; HBC33.12L (2 April 2012)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 33 of 2012L

BETWEEN:

RICHARD ERNSTER & OLIVER SLOBODETSKY
Plaintiffs

AND:

DENARAU CORPORATION LIMITED
Defendant

JUDGMENT ON APPLICATION FOR INTERIM INJUNCTION

Judgment of: Inoke J.

Counsel Appearing: Mr M A Sahu Khan (Plaintiffs)
Mr C Lateef (Defendant)

Solicitors: M K Sahu Khan & Co (Plaintiffs)
Lateef & Lateef (Defendant)

Dates of Hearing: 23 March 2012
Date of Judgment: 2 April 2012

INTRODUCTION

[1] On 28 February 2012 I delivered a judgment ex-parte in which I restrained the defendant from denying the plaintiffs and their guests access to two properties in Denarau Island. The matter then came for inter-partes hearing on 23 March 2012 as to whether the interim injunctions should continue or be discharged. This is my judgment after having considered affidavits from both parties.

THE BACKGROUND

[2] The plaintiffs are shareholders and employees of "The Helping Hand Group", a major charitable fundraising organisation in Australia. They are the beneficial owners of Lot 21 Riverside Gardens (CT No 35967) and Lot 28 Fairway Palms (CT No 32827) on Denarau Island in Nadi. During the week beginning from 13 February 2012, the security officers manning the gates to the properties stopped the plaintiffs' guests from entering or staying at these properties. These guests are invitees of the plaintiffs. The second plaintiff himself was prevented from entering lot 28. It appears that the defendant took the view that the plaintiffs are letting these properties out to their invitees as "short term lettings", which, according to the Defendant, are not permitted by the by-laws applicable to these properties. The plaintiffs deny that they are engaged in short term lettings. The plaintiffs and their guests stay at the properties from time to time and no rents are charged. The properties are sometimes given away as accommodation at fund raising events. A group of guests are expected to arrive and use the properties from 1 March 2012 and on subsequent dates. The defendant's personnel have threatened to refuse entry to these guests as well. One of the current guests had to be relocated to a hotel because of the denial of access by the defendant.

[3] The Chief Executive Officer of the defendant company filed and affidavit in reply in which he annexed the by-laws in respect of the two properties. The relevant by-laws state that the owner or occupier of a lot must not use or permit the lot to be used other than as a residence or for residential accommodation of tenants under a tenancy agreement of not less than six months without approval. He says that the defendant cannot stop the plaintiffs as owners going on to their lots but objects to them allowing third parties access to and occupation of the lots.

[4] A director of the defendant company also swore an affidavit in which he says that the intended use of the lots was for free accommodation for charitable donors in return for their donations. He also says that he had informed the first plaintiff that such a use was not permitted and gave him time to make alternative arrangements but the plaintiff has not done so. He explained that one of the attractions for the owners is that all the properties are located in gated precincts, separate from tourist facilities and hotels, for privacy and for which they pay substantial sums.

SHOULD THE INTERIM INJUNCTIONS BE EXTENDED?

[5] The law is well settled: Natural Waters of Viti Ltd v Crystal Clear Mineral Water (Fiji) Ltd [2004] FJCA 59; ABU0011.2004S & ABU0011A.2004S (26 November 2004). The plaintiff must show:

• (a) That there is a serious issue to be tried;
• (b) That damages are not an adequate remedy; and
• (c) If damages are not, the balance of convenience lies in her favour.
  

[6] The question that is central to this case is whether the plaintiffs are letting out their lots on tenancies of less than six months duration, what the defendant refers to as a "short term letting". This is a serious issue which can only be satisfactorily resolved at trial.

[7] Are damages an adequate remedy? I think in this case they are. It is not in dispute that the plaintiffs themselves are not being denied access and occupation of the lots. Only their guests are denied access. These guests can be accommodated under alternative arrangements, for example, at a hotel. If it turns out after the trial that the plaintiffs were not engaged in short term lettings, then they could be compensated by damages for those hotel expenses. That is sufficient to dispose of this application.

[8] Even if damages are not adequate, I think the balance of convenience lies in favour of dissolving the interim injunctions. Assuming that the plaintiffs are not engaged in short term lettings, it seems to me that what they are doing goes against the policy and general intended use and occupation of these areas in Denarau Island. The potential for disruption of the peace and tranquility enjoyed by other owners cannot be ignored. There are other alternatives open to the plaintiffs available to enable their guests to stay on the Island.

[9] I think the interim injunction granted on 28 February 2012 should be dissolved forthwith except in so far as they protect the plaintiffs personally.

COSTS

[10] I think costs should be costs in the cause.

ORDERS

[11] I hereby order:

(a) That the interim injunction granted on 28 February 2012 is dissolved forthwith except in so far as they protect the plaintiffs personally.

(b) That costs be in the cause.

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