Evans v Wong [2013] FJHC 85; Civil Action 05.2012 (5 March 2013)

IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION

Civil Action No. 05 of 2012

Between :

Bernard Robert Evans and Vera Heritage Evans
Applicants

And :

Leslie Gee Way Wong and Marissa Wong
Respondents

Appearances: Mr S. Fa for the applicants
Mr Shelvin Singh for the respondents

Date of hearing: 12 April, 2012

JUDGMENT

1. This is an application by the applicants for an absconding debtors warrant against the respondents.
   
2. I will recapitulate briefly the background to this application, which has spawned a trilogy of interim applications.
   

2.1 The applicants, in the first instance, filed an ex parte notice of motion dated 8th January,2012, seeking a warrant for the arrest of the respondents. In an affidavit in support, the 2nd applicant stated that the applicants had filed action against the respondents, as guarantors, for payment of a debt in High Court Civil Action No.32 of 2009. Judgment was entered against the respondents on 7th March, 2011.The applicants instituted bankruptcy proceedings. The Magistrates Court granted a receiving order on 18th October, 2011. The respondents had then, instituted appeal and moved for stay of the receiving order. The affidavit proceeded to state that the 2nd respondent had resigned from her employment, on the ground that she was to migrate shortly with her husband, the 1st respondent and that the respondents have discreetly organised the sale of their property at Ratu Sukuna Road.

2.2 On 10 January,2012, the ex parte notice of motion was supported. Justice Mr Kotigalage made order that the Registrar inform the Immigration authorities that the respondents be not permitted to leave the country until 20th January, 2012. The respondents were ordered to appear in court on that day.

2.3 On 20th January, 2012, an application was made before me by Mr S. Fa, counsel for the applicants, for substituted service on the respondents, which I allowed. I extended the order made on 20th January, 2012 to 10th February, 2012.

2.4 The solicitors for the respondents filed acknowledgement of service. The 1st respondent filed affidavit in opposition dated 26th January, 2012, stating that he was not migrating. The 2nd respondent had resigned from her employment, in order to spend time with her children. It was averred further that their personal liberty has been restricted and that the applicants had failed to disclose that they have a caveat over his property.

2.5 On 10 February,2012, the matter was argued before me inter partes. I discharged the order made on 10 January,2012, on the ground that there is no material before court to substantiate the claim, that the respondents intended to migrate.

2.6 On 8th March, 2012, the applicants filed another ex parte notice of motion for the immediate issue of a prohibition order against the 1st respondent. The 2nd applicant, in her affidavits in support, states that she has been advised that pursuant to the receiving order made against the respondents, the 1st respondent has not been granted consent by the Official Receiver to depose to the affidavit of 26th January, 2012, filed in these proceedings. The 2nd respondent has recently gone to New Zealand. It is also averred that the solicitors for the applicants, Fa & Co had been informed by sources associated with the US immigration, that the 1st respondent has been granted a visa and would leave Fiji, the following week and that the caveats placed by the applicants on two properties of the respondents, had been removed.

2.7 On 9th March, 2012, the matter was supported ex parte. I made an interim prohibition order in terms of the ex parte order of summons filed.

2.8 The applicants now seek a permanent prohibition order against the 1st respondent. The 2nd applicant, in her affidavit in support, has attached a copy of the order dated 9th February 2012,of the Chief Magistrate dismissing the respondent's application for a stay pending appeal of the receiving order.

3. The determination

3. 1 The legal question that arises for determination is whether an absconding debtor's warrant lies against a debtor, once a receiving order is made in terms of section 9 (1) of the Bankruptcy Act.

3.2 The procedure for the absconding warrant, which the applicants seek is governed by section 6 of the Debtors Act . This, so far as relevant, provides:

If it is shown to the satisfaction of the court that the defendant in any action for the recovery of a sum exceeding ten dollars is about to abscond, the court may, in its discretion, issue a warrant to arrest the defendant and commit him to prison, .. and costs, for his appearance at any time when called upon while the action is pending and until execution or satisfaction of any judgment that may be made against him in the action;. (emphasis added )

3.3.1 Mr Shelvin Singh, counsel for the respondents has advanced the proposition that section 6 has no applicability to the matter before me. The principal contention is that the section does not apply in respect of a private contract, as opposed to an imposition by law. The second contention was that section 6 applies to pending actions.

3.3.2 In support of the first proposition, the case of Sundarjee Brothers Ltd v Coulter, (1987) 33 FLR 74 was relied on. In that case, the Fiji Court of Appeal stated obiter:

The commercial community of Fiji may well be sometimes adversely affected by a finding that simple contract debts are outside the ambit of section 6 of the Debtors Act but we do not think it as a body meets the prescription of "the public interest" which we have set out above. There is also a competing constitutional interest to be considered namely that of those persons minded to leave Fiji who may be impeded by a mere money claim for ten dollars or so which may be frivolously or fraudulently made and which may or may not be sustainable in a court of law......

It excludes actions in contract from the ambit of section 6 of the Debtors Act and it is to that extent only that the section is void. (emphasis added )

This elucidation of section 6 was adopted in Westpac Banking Corporation v. Chandra, (1991) FJHC 84,Devi v. Rizwan, (2009) FJHC 100 and Devi v. Mani, (2010) FJHC 429 .

3.4 Mr Fa's riposte was that Sundarjee Brothers Ltd v Coulter, (supra) is distinguishable, as in that case, the application under section 6 was made at the stage the writ was filed, unlike in the present matter, where a judgment has been obtained. It was also argued that the judgment against the respondents constitutes a debt imposed by law. Moving on, Mr Fa contended that since there are inconsistencies between the common law and section 6, the section must take precedence. I find these arguments unconvincing.

3.5 The judgment in Sundarjee Brothers Ltd v Coulter, is in my view, deeply penetrative in its analysis of section 6, in the light of article 14(3) of the then Constitution of Fiji. This article enshrined that reasonably justifiable restrictions may be "imposed by..law" on the right of any person to leave Fiji. Their Lordships construed the expression "imposed by..law" to mean "an imposition by a superior authority by which a person becomes liable to pay whether he will or not", quoting Fry L.J. in Badcock v Hunt[1888] UKLawRpKQB 201; , (1889) 22 QBD 145 at page 149 as against where " a person can only be made liable with his own consent" per Lord Esher MR in the same case. In my judgment, leaving aside article 14(3), which is nonexistent, the principle stated in Sundarjee Brothers Ltd v Coulter, accords with legal common sense and reason. I would agree with the following conclusion of Justice Inoke in Devi v. Mani (supra):

I do not think it makes any difference now that there is no Constitution because the Common Law recognises the right to freedom of movement and the application of International Conventions such as the Universal Declaration on Human Rights remain intact. The principle in Sundarjee Brothers Ltd is still good law, in my respectful opinion

3.6 The second argument of Mr Shelvin Singh concentrates on the phrase "while the action is pending and until execution or satisfaction of any judgment that may be made against him in the action" in section 6. I find guidance from the passage in Sundarjee Brothers Ltd v Coulter, (supra) which I have reproduced above. In my judgment, the section cast as it is in specific terms, envisages pending actions and excludes from consideration judgments that have been executed or satisfied, as in the present case, where the respondents have been declared bankrupt.

3.7 This brings into play section 9 of the Bankruptcy Act. I read section 9 (1):

On the making of a receiving order the official receiver shall be thereby constituted receiver of the property of the debtor, and thereafter, except as directed by this Act, no creditor to whom the debtor is indebted in respect of any debt provable in bankruptcy shall have any remedy against the property or person of the debtor in respect of the debt or shall commence any action or other legal proceedings, unless with the leave of the court and on such terms as the court may impose. (emphasis added)

The language of the section I have emphasised makes it clear that once a receiving order is made, a creditor may not seek any remedy against a debtor, without leave of court

3.8 It was submitted by Mr Fa, that this application is made under Or 111, r 1 and 2 of the High Court Rules. This provision sets out the procedure to be adopted "under section 6 of the Debtors Act..". I would quote the following statement of Justice Scott in Westpac Banking Corporation v. Chandra(supra):

Order 111 of the High Court Rules and Order XX of the Magistrates' Court Rules are merely different procedural avenues for attaining the same relief namely the arrest of an absconding debtor. In my opinion the law in Fiji is that neither avenue may properly be used to seek the arrest of an absconding debtor who is seeking to avoid repayment of a purely private debt as opposed to payment of an impost for which he is liable. (emphasis added)

3.9 In my judgment, the application of the applicants for a debtors absconding warrant is misconceived. A fortiori, in recognition of the principle that the statute must be construed in favour of the liberty of the subject, as held in the quartet of cases referred to above.

3.10 Mr Fa, has next contended in his written submissions, that justice requires that the Official Receiver be made a party to these proceedings. In response, Mr Shelvin Singh, has cited the following passage from Halsbury, Laws of England,Vol 3 (4th Edition), paragraph 368 :

Effect on debtor's estate. The making of the receiving order vests on estate or interest in the official receiver; it gives him no power to bring or defend actions; and it causes no change or transmission of interest or liability so as to render it necessary or desirable that he should be made a party to any action which the debtor is bringing or defending.(emphasis added)

As Sterling J. stated in In re Berry, Duffield v Williams[1896] UKLawRpCh 12; , (1896) 1 Ch 939 at 946 the " language of ss. 9 and 10 of the Bankruptcy Act, 1883, appears to me to shew that the Legislature did not contemplate that the official receiver (although he has power to deal with proofs) should be mixed up with actions pending against the debtor.Sect.9 prohibits the "commencing" of actions or proceedings, except with the leave of the Court." (emphasis added).

In my judgment, there is no legal basis for the Official Receiver to be made a party to these proceedings.

4. Orders

I make order as follows:

(a) The prohibition order made against the 1st respondent is discharged.
(b) The application for a permanent prohibition order against the 1st respondent is declined.
(c) The application for the Official Receiver to be made a party is declined.
(d) The applicants shall pay the respondents costs in the sum of $ 3000 summarily assessed within 21 days of this judgment.

05 March, 2013

A.L.B.Brito-Mutunayagam
Judge