Waiqele Sawmills Ltd v Seru [2017] FJHC 738; HBC35.2016 (27 September 2017)

IN THE HIGH COURT OF FIJI
AT LABASA
CIVIL JURISDICTION

Civil Action No. HBC 35 of 2016

BETWEEN : WAIQELE SAWMILLS LIMITED a limited liability company having its registered office in Qelewaqa, Labasa.

PLAINTIFF

AND : MAULISIO SERUa representative of Mataqali Doicoi, Natokalau Village, Vanua Levu.

1^stDEFENDANT

AND : ABOROSIO DRUNAQIO, FABIANO VALEBOGI AND RAFAELE JONETANI SAWAI, representatives of the village Natokalau consisting of five mataqali.

2^nd DEFENDANTS

AND : RAFAELE VUIof Natokalau, Bua.
3^rd DEFENDANT

Appearances : Maqbool & Co. for the Plaintiff

No appearance for the 1^st Defendant

Messrs Kohli & Singh for the 2^nd Defendants

Gibson & Co. for the 3^rd Defendant

Ruling : 27 September 2017

RULING

Introduction

1. On 18 July 2016, this Court granted an ex-parte injunction restraining all the parties, whether by themselves, their employees, servants or agents, contractors or howsoever, from harvesting and or logging pine trees on mataqali land being Lot 12 NLC 54 containing an area of 103.19 hectares, until further orders of the Court. The application was then ordered to proceed inter partes and orders made for the filing of affidavits. While the Plaintiff’s application was pending, the 2^nd Defendants filed another application for injunction against the 3^rd Defendant.Both applications were heard together and this Ruling is in respect of both.
   

Background

2. The Plaintiff instituted this action seeking, inter alia, special and general damages, as well as injunctive relief, restraining:
   
   • the 1^st and 2^nd Defendants from interfering with the Plaintiff’s rights in removing pine trees/logging from the Defendants’ mataqali land, being Lot 12 NLC 54;
   • the 3^rd Defendant...from harvesting and/or logging pine trees on the said mataqali land;
   • all the Defendants...from interfering with the Plaintiff’s harvesting, logging or removing pine trees from the said mataqali land.
     
3. In support of the application, Abdul Aziz Begg, Managing Director of the Plaintiff Company deposed that Mataqali Doicoi and 5 other Mataqali of the village Natokalau are owners and persons entitled to the pine trees on all the land comprised in Lot 12 NLC 54 containing an area of 103.19 hectares. By a memorandum dated 5 July 2013, the 1^st and 2^nd Defendants had agreed to allow the Plaintiff to harvest all the pine logs on the said land. However, the Plaintiff has discovered that in breach of the said agreement, the Defendants have allowed other persons to log the pine trees on their land.
   
4. Rafaele Jonetani Sawai deposed the answering affidavit filed for the 2^nd Defendants. He agrees that with the consent and authority of all Mataqali members, and in accordance with the scheme approved by the Bua Provincial Council, he had entered into an agreement with the Plaintiff Company. The 3^rd Defendant without the consent or authority of the Mataqali members is trying to harvest the pine trees on Lot 12 NLC 54 in an attempt to deprive the beneficiaries of the proceeds of the said pine trees. The 5 mataqali are entitled to the entire proceeds for the pine, as per the scheme; that other than Mataqali Doidoi, all the rest of the Mataqali members had taken part in the planting of the pine trees on the understanding that the proceeds would be shared in accordance with the scheme and under the guidance of the nominated and chosen trustees; that the 3^rd Defendant without any colour of right is getting the pine trees harvested and channelling all the proceeds into his personal account without accounting for it to the rest of the Mataqali who are the beneficiaries; that it is in the interest of all the parties that the pine trees be preserved until such time the Roko Tui Bua, iTaukei Affairs Board and the relevant Mataqali members resolve how the pine trees are to be harvested and proceeds distributed.
   
5. Sawai says that as the Turaga ni Koro, he had written to Mataqali Doidoi seeking their permission to harvest the pine on their land. Members of the Mataqali Doidoi, including the 3^rd Defendant, approved for the pine to be harvested.
   
6. As confirmed by the Bua Provincial Council, there is no Turaga ni Mataqali for Doidoi at present, but Maulisio Seru, a representative of Mataqali Doidoi, was authorised to act on behalf of the said Mataqali. Annexed is a copy of a letter from the Bua Provincial Council, dated 25 July 2016 stating that there is no official Turaga ni Mataqali for Mataqali Doidoi.
   
7. Sawai says he obtained the consent of the majority of the members of Mataqali Doidoi and at a meeting held on 7 February 2013, the majority of the villagers agreed for the Plaintiff to harvest the pine. Accordingly, an agreement with the Plaintiff was entered into on 5 July 2015 to harvest the pine. Though the pine trees are planted on land belonging to Mataqali Doidoi, it belongs to all the members of the 5 mataqali in the village of Natokalau. Allowing Mataqali Doidoi to harvest the pine could deprive the other 4 Mataqali of their entitlement to the proceeds.
   
8. It is clear from Sawai’s affidavit for the 2^nd Defendants that they support the injunction for the preservation of the pine trees until determination of this action.
   
9. On the other hand, the 3^rd Defendant deposes that the Plaintiff/Applicant has misrepresented the true facts of the case to the Court in that:
   
   • Maulisio Seru who contracted with the Plaintiff did so without authority. At the time in 2013, the Turaga ni Mataqali was Maulisio Bolalele who was very old;
   • On 15 July 2013, he was given authority to act on behalf of the said Maulisio Bolalele to stop the Plaintiff’s illegal actions;
   • Not long thereafter, Maulisio Bolalele died and he became the Turaga ni Mataqali of Mataqali Doidoi;
   • The 2^nd Defendants are members of Mataqali Niuvouvou, not Doidoi;
   • The pine trees on Doidoi land being Lot 12 NLC No. 54 containing an area of 255 acres belongs to the Doidoi and not the other mataqali;
   • Doidoi did not at any time contract with the Plaintiff;
   • Instead, the Plaintiff had contracted with and paid monies to the wrong persons who had no authorisation to represent Doidoi;
   • The 3^rd Defendant never contracted with the Plaintiff and there being no privity of contract, there is no cause of action against him or the Mataqali Doidoi;
   • As the Turaga ni Mataqali of Doidoi, he is the correct representative of the Mataqali. He has appropriately taken out a licence to log pine belonging to Doidoi;
   • The Plaintiff obtained an injunction against him by misrepresenting the facts and the injunction should be removed immediately;
   • The Plaintiff to pay to him costs in the sum of $2000.
     
10. In reply, the Plaintiff avers inter alia:
    
    • the 1^st and 2^nd Defendants have beneficial interest in the pine trees and were entitled to enter into an agreement as per the scheme approved by the Bua Provincial Council and all mataqali members;
    • the 3^rd Defendant is unlawfully trying to convert the proceeds of the pine trees for his personal benefit with full knowledge of the existence of an agreement by the 1^st and 2^nd Defendants;
    • in fact, the 3^rd Defendant had called into the Plaintiff Company’s office on numerous occasions and there discussed the harvesting of pine trees;
    • the Plaintiff is entitled to harvest the pine trees pursuant to the harvesting agreement between it and the 1^st and 2^nd Defendants who had both legal and equitable rights over the said pine trees;
      

Legal Principles

11. An interlocutory injunction is a remedy that is both temporary and discretionary in nature. (American Cyanamid v. Ethicon Limited [1975] UKHL 1; [1975] 1 All ER 504 per Lord Diplock) As a temporary remedy, it is obtained before the final determination of the parties’ rights in an action and so it is framed in such a way as to show it is to last only until the determination of the matter concerned.
    
12. The principles on the grant of interim injunctions and whether to dissolve such an injunction pending determination of the matter, are settled. As stated by Lord Diplock in Cyanamid(supra), they are:
    
    • (i) whether there is a serious question to be tried;
    • (ii) whether damages be an adequate remedy, and;
    • (iii) the balance of convenience.
      
13. Where an interim injunction has been granted ex parte, the Plaintiff bears the onus of satisfying the Court that the injunction ought to continue. (Westpac Banking Corporation v. Adi Mahesh PrasadCiv App ABU 27 of 1997S (FCA Reps 99/1)
    
14. In Digicel (Fiji) Ltd v Fiji Rugby Union [2016] FJSC 40; CBV0004.2015 (26 August 2016), Marsoof J stated:
    

According to the procedure adopted by our courts which are called upon to decide any application for interlocutory injunction, the evidence consists entirely of admissions on record by way of pleadings and the content of affidavits that are filed by the parties.

Analysis

15. The first issue for determination is whether there is a serious question to be tried. This is the threshold test or question. In Digicel (Fiji) Ltd v Fiji Rugby Union [2016] FJSC 40; CBV0004.2015 (26 August 2016), Keith J, referring to the principles set out by Lord Diplock in Cyanamid (supra), stated:
    

The court first considers whether there is a serious issue to be tried. That does not mean that the court must be satisfied that there is a strong case for granting an injunction at the trial of the action. If an interlocutory injunction is to be granted, the court only has to be satisfied that the claim is neither frivolous nor vexatious.

16. In Cyanamid (supra) at 406, Lord Diplock stated:

My Lords, when an application for an interlocutory injunction to restrain a defendant from doing acts alleged to be in violation of the plaintiff’s legal right is made upon contested facts, the decision whether or not to grant an interlocutory injunction has to be taken at a time when ex-hypothesi the existence of the right or the violation of it, or both, is uncertain and will remain uncertain until final judgment is given in the action. It was to mitigate the risk of injustice to the plaintiff during the period before that uncertainty could be resolved that the practice arose of granting him relief by way of interlocutory injunction; but since the middle of the 19^th century this has been made subject to his undertaking to pay damages to the defendant for any loss sustained by reason of the injunction if it should be held at the trial that the plaintiff had not been entitled to restrain the defendant from doing what he was threatening to do. The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not beadequately 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.

17. There is no dispute that the Plaintiff had entered into an agreement with the 1^stand 2^nd Defendants for it to, inter alia, harvest pine on Doidoi’s land, with a third of the proceeds therefrom to be paid to Doidoi, and two-thirds to the 2^nd Defendants, as representatives of the village Natokalau. It is also not disputed that subsequent to the agreement, the 3^rd Defendant obtained a Forest Rights Licence to remove pine logs from the said land. At the time of the ex parte injunction, he had started logging the pine trees on the land.
    
18. The 2^nd Defendants support an injunction pending the determination of this matter. Indeed, their defence is such that it is not they who had breached the agreement with the Plaintiff, but rather, the 3^rd Defendant who, with full knowledge of the existence of an agreement with the Plaintiff, arranged and carried out logging operations under his licence.
    
19. For his part, the 3^rd Defendant says the 1^st Defendant who contracted with the Plaintiff did not have authority to do so on behalf of Doidoi. On 15 July 2013, Maulesio Bolalele as the then Turaga ni Mataqali Doidoi authorised him (3^rd Defendant) to act in Bolalele’s behalf to stop the Plaintiff’s actions. After the death of Maulesio Bolalele, he, the 3^rd Defendant, became the Turaga ni Mataqali. The pine on Doidoi land, he says, belongs to Doidoi and not any other mataqali.
    
20. In sum, what is in disputeappears to be:
    
    • (i) whether the 1^st Defendant Maulisio Seru, was the chosen representative of Doidoi and had the authorisation of the Mataqali to, in its behalf, enter into an agreement with the Plaintiff to harvest the pine trees standing on Doidoi land;
    • (ii) whether the pine belongs to Doidoi only, or to all the 5 mataqali of Natokalau
      
21. It is not possible to resolve these issues on the conflicting affidavit material before the Court. For one, the Plaintiff and 2^nd Defendants’ stand that Maulisio Seru had the approval of the majority of Doidoi to enter into an agreement for the harvesting of the pine on the land seems to find support in a letter signed by some Doidoi members. On the other hand, the 3^rd Defendant’s allegation that Maulisio Seru did not have the consent of the Turaga ni Mataqali – Maulesio Bolalele, and Doidoi, puts reliance on a letter signed by other members of Doidoi, some of whom have their names and signatures in the first letter as well. A fortiori where one of the names and signatures which appears on both letters, seems to me to be the name and signature of the 3^rd Defendant himself who alleges Maulisio Seru did not have Doidoi’s authorisation to represent the Mataqali and enter into a contract with the Plaintiff.
    
22. Secondly, from the affidavit material, it is not possible to answer the question as to whether the pine trees on Doidoi land belong to all the mataqali in Natokalau or to Doidoi alone.
    
23. I do not think the Plaintiff’s action is frivolous or vexatious. Rather, I am convincedof the existence of serious issues to be tried.
    
24. That the 3^rd Defendant was not a party to the agreement is of no moment in this instance, especially given the undisputed evidence of the Plaintiff that the 3^rd Defendant had known of the existence of the agreement between the Plaintiff and the 1^st and 2^nd Defendants as to the logging of the pine trees on Doidoi land prior to obtaining a licence to log and thereafter logging the said pine trees.
    

Adequacy of damages

25. In Cyanamid (supra) at 408, Lord Diplock explained the principles relevant to a decision on where the balance of convenience lay, as follows:
    

...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 the (sic) 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 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.

26. In Fiji, the Court of Appeal has dealt with the principles pertinent to the balance of convenience and it is, I think, apt to refer to some of these decisions.
    
27. In Professional West Realty (Fiji) Ltd v Professionals Ltd, Civil Appeal No. ABU 0072 of 2008 (21 October 2010) at [37], the Court (per Byrne AP and Calanchini JA) stated:
    

Having determined, correctly in our opinion, that the material did raise a serious question to be tried, the learned judge was required to consider the balance of convenience. In some decisions the balance of convenience test is considered under two separate heads and in others the approach is that there are a number of factors that need to be considered in determining the balance of convenience. However, regardless of the approach adopted, the learned judge was required to consider whether an award of damages would be an adequate remedy for the Respondent if successful on the question of liability at the trial of the action.

28. In Honeymoon Island (Fiji) Ltd v Follies International Ltd, Civil Appeal No. ABU0063 of 2007S (4 July 2008) at [13], the Court of Appeal (per Pathik, Powell, and Bruce JJA) stated:
    

As a prelude to considering the balance of convenience the Court must consider whether or not the applicant will suffer irreparable loss, being loss for which an award of damages would not be an adequate remedy, either because of the nature of the threatened loss, or because the party sought to be restrained would not be in a position to satisfy an order for damages. “If damages...would be an adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted”: American Cyanamid...

29. In Chung Exports Ltd v Food Processors (Fiji) Ltd., Civil Appeal No. ABU0012 of 2003 (26 August 2003) at [13], the Court (per Eichelbaum, Tompkins, and Penlington JJA) stated:
    

The court will consider whether there is a serious question to be tried, and if so, where lies the balance of convenience. The latter will require consideration of such factors as the relative strength of the plaintiff’s claim, whether damages will be an adequate remedy, whether the defendant is in a position to pay damages, and any other relevant factors. If the factors are reasonably balanced, it may be appropriate to maintain the status quo. In the end, the court is required to determine where the overall justice lies.

30. In Professional West Realty (supra) at 43, the Court had this to say:
    

The balance of convenience is often approached by considering the harm to the Plaintiff that may result in the event that the injunction is not granted and the harm to the Defendant that may result in the event that the injunction is granted. The onus lies on the Plaintiff to establish that on balance the harm that it is likely to suffer if the injunction is not granted outweighs any detriment to the Defendant in the event that the injunction is granted.

31. The Plaintiff’s position is that it will suffer irreparable damage for which it is more than likely to be unable to recover any damages if the Defendants are not restrained. It says that it had paid the Defendants a sum of $6,670 prior to execution of the agreement, and a further sum of $25,000 at the time of execution. Its undertaking as to damages cites ownership of several properties in Fiji including a large commercial building near the Labasa market, a term deposit with LICI in excess of two million dollars and an operation at Qelewaqa worth more than ten million dollars.
    
32. The 2^nd Defendants support the application for injunction and have filed one of their own.
    
33. On the other hand, the 3^rd Defendant has not said anything about adequacy or otherwise of damages, let alone given an answer to the Plaintiff’s undertaking as to damages and claim that it is capable of paying damages. I bear in mind that the Defendant carries no onus, and that it is the Plaintiff that bears the burden of satisfying the Court that the injunction ought to continue. I am satisfied that the Plaintiff has done that here, in light, inter alia, of its undisputed claim that it is in a financial position to pay damages, and that it will not be able to recover any damages from the 3^rd Defendant absent a restraining order. I find that damages would not be an adequate remedy as the 3^rd Defendant would not be in a position to satisfy an order for damages. I consider that the balance of conveniencefavours the continuation of the injunction granted ex-parte.
    
34. Subsequent to the hearing, counsel for the 2^nd Defendants who filed the second application for a restraining order against the 3^rd Defendant, submitted that there was no need to proceed with their application in the event the Court grants the Plaintiff’s application for injunctive relief. Having found in favour of the Plaintiff’s application, there is now no need to decide the 2^nd Defendants’ application for injunction, which is accordingly struck out.
    
35. Order
    1. The interim injunction granted on 18 July 2016 is to continue, pending the final determination of this action.
    2. The 2^nd Defendants’ summons for injunction against the 3^rd Defendant is struck out.
    3. Costs to be in the cause.
       

Dated at Labasa this 27^th day of September 2017.

S.F. Bull
Acting Master