Flour Mills of Fiji Ltd v Dayal (Fiji) Artesian Waters Ltd [2013] FJHC 530; HBC157.2009 (14 October 2013)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
Civil Action No. 157 of 2009

BETWEEN:

FLOUR MILLS OF FIJI LIMITED, a limited liability company having its registered office at Leonidas Street, Walu Bay, Suva in the Republic of Fiji Islands.
Plaintiff

AND:

DAYAL [FIJI] ARTESIAN WATERS LIMITED, a limited liability company having its registered office at 1 Kings Road, Yalalevu, Ba in the Republic of Fiji Islands.
Defendant

Counsel: Mr Nagin H – Sherani & Company

Date of Hearing: 11th October, 2013
Date of Interlocutory
Judgment: 14th October, 2013

INTER-LOCUTORY JUDGMENT

1. Ex-parte Notice of Motion for Mareva Injunction was filed on 1st October 2013 and the Plaintiff sought the following orders:

(1) That the Defendant by itself and/or through its servants and/or agents or howsoever be restrained from transferring, selling, charging, mortgaging, disposing or in any manner whatsoever dealing with any of its real properties, equipment, machinery or any other property of whatsoever nature over which it has ownership or control within the jurisdiction of this court.

(2) That the Defendant do forthwith disclose within seven days after the service of the order on them and serve on the Plaintiff's Solicitors an affidavit disclosing the full value of all and each of its assets within the jurisdiction of this Court identifying with full particularity the nature and whereabouts of all such assets and whether the same are held in its own name or jointly or by nominees or companies on its behalf and in particular specifying:-

(a) the identity of all bank, financial institution or other accounts held in its name either jointly or by nominees on its behalf and the balance of each of such accounts and the name and addresses of the branch at which it is held;

(b) any other assets, money or goods owned by the company and the whereabouts of the same and the names and addresses of all persons having possession, custody or control of such assets, moneys or goods at the date of service of this order.

(3) Further or other relief(s).

(4) Cost of this application.

2. The Chief Executive Officer of the Plaintiff sworn the Affidavit in Support dated 1st October 2013 and deposed the following inter-alia:

(a) On or about the 11th June 2009, the Plaintiff filed a Writ of Summons and on 24th September 2009 filed Notice of Motion for Interlocutory Injunction and Affidavit in Support seeking certain interlocutory orders (copy of the Notice of Motion was annexed marked 'A' to the Affidavit);

(b) The said motion was called before the court and adjourned and the parties entered into Terms of Settlement dated 29th October 2009 (copy annexed thereto marked 'B') and the action took its normal cause;

(c) The chronology of events were detailed in paragraph 4 of the Affidavit:

(i) Amended Statement of Claims filed 15/01/2010;

(ii) Statement of Defence and Counter Claim filed on 12/07/2010;

(iii) Reply to Defence filed 01/09/2010;

(iv) Summons for Directions filed 04/01/11;

(v) Order on Summons for Direction was made and filed on 18/02/2011;

(vi) Affidavit verifying Plaintiff's List of documents filed on 13/04/2011;

(vii) The Defendant did not file its Affidavit of Documents;

(viii) The Master on 28th July 2011 struck out the Defendant's Statement of Defence and Counter Claim and entered judgment for the Plaintiff;

(ix) Order filed on 08/08/2011.

(d) The Defendant was informed and he verily believes the Defendant is selling all its assets to Carpenters Fiji Limited (Carpenters). Mr Suruj Sharma, Solicitor for Carpenters as part of his due diligence, telephoned the deponent to find out about the Plaintiff's claim against the Defendant in this matter. The deponent advised him about the claim against the Defendant and also referred to him to Mr Hamendra Nagin of Sherani and Co. if he required any documents. The deponent was informed by Mr Nagin and verily believe that the said Sharma subsequently spoke to Mr Nagin and requested to certain documents in this action and those documents were supplied to Mr Sharma;

(e) The Plaintiff has obtained Judgment against the Defendant as per the Order of the Master made on 28/07/2011 (Annexure 'C') and the assessment of damages still needs to be done under the said judgment by this court and anticipated that the damages to the Plaintiff in this matter could be assessed in excess of $750,000.00;

(f) The deponent further stated that the Defendant is now selling away all its assets and equipment and intend and proceed to the Plaintiff depriving of the fruits of Judgment;

(g) The Plaintiff stated there are no arrangements made for payments to the Plaintiff the sum likely to be assessed;

(h) The Plaintiff stated it is a substantial company and has assets worth in excess of $150,000,000.00 and given an undertaking to damages and pleaded for an order in terms of the Ex-parte Notice of Motion filed.

3. When this matter came before this Court on 11th October 2013, Mr Nagin made submissions i.e.:

(i) If the Mareva Injunction is not granted the Judgment by the Master shall become nugatory;

(ii) The counsel stated he relies on the principles laid in the case of Merchant Bank of Fiji v. Girdhar Lal Raniga & Another 1993 FLR (Volume 39) page 181;

(iii) It was stated he relies on the contents of the Affidavit in Support sworn by Ramacharan Shivanand Bajekal;

(iv) On inquiry by the Court Mr Nagin, counsel stated he had a discussion with Suruj Sharma of Patel Sharma Lawyers, the solicitors for Carpenters and the documents were forwarded to them through his Clerk and stated that any covering letter was not sent neither acknowledgment was obtained from the solicitors for Carpenters (refer to paragraph 2(d) of this Judgment). I directed the counsel to confirm the documents were delivered and I find the Law Clerk of Sherani and Company, Ritesh Chandra Singh had filed an Affidavit dated 14th October 2013 to the effect that the amended Statement of Claim; Statement of Defence and Reply to Defence was handed to Patel Sharma Lawyers on instructions of Mr Nagin on 20th September 2013.

Analysis and Law

4. Principles of Mareva Injunctions firstly created by English Courts to prevent foreign companies removing their assets from the jurisdiction of the court before a trial; resulting the Plaintiff holding on empty judgment or hollow judgment. Solution was first offered in two successive cases in 1975 Nippon Yasen Kaisha v. Karageo GLSs (1975) 1WLR 1093 3 ALL ER 282 and Mareva Compania S.A. v. International Bulkcarriers SA (1975) 2 Lloyd's Rep 509. At early stages, the Mareva Injunctions were granted against foreign companies preventing them from dissipating assets from the jurisdiction or misappropriation of the Assets to frustrate a judgment, however, in the case of Rahman (Prince Abdul) v. Abu Taha [1980] 1WLR 1268, it was extended to local residents not only restraining the assets being removed from the jurisdiction but also restraining the dissipation of the assets from the jurisdiction of the court as well.

5. The principles governing Mareva Injunction are applicable in Fiji as decided in the case of James Madhavan v. John Neil Falvey & Others [1973] FLR 140 at 146 held that:

"By section 22(1) of the Supreme Court Ordinance (Cap 4) the Common Law, the rules of equity and the statutes of general application which were in force in England on 2nd January 1875, became law in Fiji inter-alia to any Fiji legislation".

6. The Judgment in this case was sealed on 17th August 2010 and Orders were made as follows:

"1. There is no Affidavit or documents filed by the Defendants as ordered on 31st May 2011;

2. The Statement of Defence and Counter Claim filed on 12th July 2010 be struck out;

3. Judgment for the Plaintiff."

It is important to note that the Defendant's counsel Mr Samad had appeared when the Orders were made by the Learned Master on 28/7/2011 which was sealed on 17th August 2011 and no steps had been taken by the Defendant to challenge the said Judgment. The Plaintiff too had not taken any steps to assess the damages to date. However, considering all factors, I conclude there is a final judgment in this case and by the actions of the Defendant as pleaded in the Affidavit in Support there is an imminent danger of disposing of the assets by the Defendant. As stated in the Affidavits this court is satisfied that a sale is being negotiated with Carpenters by the Defendant.

7. As such there is an urgency to preserve the assets for the Judgment already obtained and there are exceptional circumstances to issue the Orders sought in the Ex-parte Notice of Motion dated 1st October 2013.

8. However, I am not satisfied with the undertaking to damages given in the Affidavit and the Plaintiff required to support the undertaking for damages by providing security. The statement made by the Plaintiff's counsel that the Plaintiff is a listed company is not sufficient for the purpose and the annual report filed today is not considered for the purpose of this order.

Accordingly, I make the following orders:

(i) Order sought under paragraph 1 of the Ex-parte Notice of Motion dated 1st October 2013 is granted and in force until 1st November, 2013;

(ii) Order sought under paragraph 2 of the Notice of Motion is granted and varied as follows:

2. That the Defendant forthwith disclose within 21 days after the service of the order on them and serve on the Plaintiff's Solicitors an affidavit disclosing the full value of all and each of its assets within the jurisdiction of this Court identifying with full particularity the nature and whereabouts of all such assets and whether the same are held in its own name or jointly or by nominees or companies on its behalf and particular specifying:

(a) The identity of all bank, financial institution or other accounts held in its name either jointly or by nominees on its behalf and the balance of each of such accounts and the name and addresses of the branch at which it is held;

(b) Any other assets, money or goods owned by the company and the whereabouts of the same and the names and addresses of all persons having possession, custody or control of such assets, moneys or goods at the date of service of this order.

(iii) The above orders shall be operative subject to the deposit of $10,000.00 as security for costs with the Chief Registrar of this court by the Plaintiff.

Delivered at Suva this 14th Day of October 2013.

C. Kotigalage
JUDGE