Gounder v Shaheem [2020] FJHC 1031; HBC225.2020 (24 November 2020)

IN THE HIGH COURT OF FIJI
WESTERN DIVISION AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION No. HBC 225/2020

BETWEEN PARMEN KRISHNA GOUNDER of Olarara, Sigatoka

FIRST PLAINTIFF

AND AMLESH AVIKASH SINGH of Vutuni, Ba

SECOND PLAINTIFF

AND MOHAMMED SHAHEEM of Namada, Ba

DEFENDANT

APPEARANCES : Mr Dayal & Mr S Datt for the first and second Plaintiffs

Mr S Khan for the First Defendant

DATE OF HEARING : 12 November 2020

DATE OF JUDGMENT : 24 November 2020

DECISION

1. This is a dispute about the ownership and possession of a successful race-horse named Volcano. By writ of summons filed on 22 September 2020 the first and second plaintiffs seek the return of the horse (which they say that the first plaintiff owns) by the defendant. In a statement of defence filed on 23 October 2020 the defendant says he is the owner, having bought the horse from the second plaintiff for $7,000 in June 2020.
   
2. Simultaneously with filing the writ of summons, the plaintiffs made an on-notice application for an interim injunction that the horse be returned by the defendant to the first plaintiff pending the final outcome of the proceedings. This decision deals with that application.
   
3. In support of and opposition to the application the following affidavits were filed and served:
   

i. an affidavit sworn on 22 September by the first plaintiff.

ii. an affidavit sworn 22 September by the second plaintiff

3. an affidavit sworn on 21 October 2020 by the defendant in response to the first plaintiff’s affidavit.
4. an affidavit sworn on 21 October 2020 by the defendant in response to the second plaintiff’s affidavit.

v. an affidavit sworn on 29 October 2020 in reply by the first plaintiff.

vi. an affidavit sworn on 29 October 2020 in reply by the second plaintiff.

For the purposes of this decision there is no need for me to canvas the facts in any detail. It is not contested that in February 2019 the first plaintiff, being about to go overseas to work, had given the second plaintiff the possession and use of the horse (but not, he says, the ownership), which the second defendant was racing as his own, telling others that he had bought it from the first plaintiff for $7,000. The second plaintiff acknowledges making this assertion, but says that this claim to ownership was to so that the horse does not get stolen. I am not sure that I understand the thinking behind this, but it is something that I do not need to decide in the context of this application. The second plaintiff says he gave possession of the horse to the defendant in June 2020 when the defendant offered to help with looking after the horse. The second plaintiff’s brother, who had been helping him with the horse, had been injured by the horse, and the second plaintiff says that he agreed to the defendant taking Volcano to participate in races around Fiji, with the proviso that the defendant was not to change the name of the horse, and would return it to the second plaintiff on request.

4. In September 2020 the second plaintiff, at the request of the first plaintiff, asked the defendant to return the horse. The defendant refused to do so, claiming to have bought the horse in June for $7,000.00. In the course of these proceedings the defendant has produced a receipt for payment of the $7,000.00 which, he says, bears the signature of the second defendant. The genuineness of this receipt is hotly contested, and there are certainly questionable aspects about it, including the dissimilarity between the signature on it, and the signature used by the second plaintiff in his affidavits. Counsel for the defendant suggests that the second plaintiff, knowing of the existence of the receipt, deliberately changed his signature on the affidavits so that it was different from that on the receipt. That sounds far-fetched, but perhaps no more so than the allegation by the plaintiffs that the defendant is bribing people to lie in support of his case. Again, these are things that I don’t need to, and cannot decide at this point.
   

The law

5. This being an application for an interim injunction the principles upon which it should be decided are those set out in the well-known decision of Lord Diplock in the House of Lords in American Cyanamid v Ethicon [1975] UKHL 1; [1975] 1 All ER 504, i.e. whether there is a serious question to be tried, and if so where does the balance of convenience lie. In NWL Ltd v Woods [1979] 3 All ER 614 (followed by the New Zealand Court of Appeal in Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] NZCA 70; [1985] 2 NZLR 129) the House of Lords recognised the need to also take into account the overall justice of the case. As Denning LJ explained in Hubbard v Vosper [1972] 1 All ER 1023, at 1030:
   

In considering whether to grant an interlocutory injunction, the right course for a judge is to look at the whole case. He must have 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 restraint on the defendant but leave him free to go ahead. For instance, in Fraser v Evans, 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 rules.

but this in no way dilutes the importance of the core principles established by American Cyanamid.

6. Emphasising the threshold nature of the ‘serious question’ principle Lord Diplock had this to say in his speech in American Cyanamid (at 510):
   

Your Lordships should in my view take this opportunity of declaring that there is no ... rule [that the court is not entitled to take any account of the balance of convenience unless it has first been satisfied that if the case went to trial on no other evidence than is before the court at the hearing of the application the plaintiff would be entitled to judgment for a permanent injunction in the same terms as the interlocutory injunction sought].

The use of such expressions as 'a probability', 'a prima facie case', or 'a strong prima facie case' in the context of the exercise of a discretionary power to grant an interlocutory injunction leads to confusion as to the object sought to be achieved by this form of temporary relief. The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried.

It is no part of the court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial. One of the reasons for the introduction of the practice of requiring an undertaking as to damages on the grant of an interlocutory injunction was that 'it aided the court in doing that which was its great object, viz abstaining from expressing any opinion upon the merits of the case until the hearing (Wakefield v Duke of Buccleuch ((1865) 12 LT 628 at 629)). So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought.

7. As to the adequacy of damages Lord Diplock had this to say:

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 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. If, on the other hand, damages would not provide an adequate remedy for the plaintiff in the event of his succeeding at the trial, the court should then consider whether, on the contrary hypothesis that the defendant were to succeed at the trial in establishing his right to do that which was sought to be enjoined, he would be adequately compensated under the plaintiff's undertaking as to damages for the loss he would have sustained by being prevented from doing so between the time of the application and the time of the trial. If damages in the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason this ground to refuse an interlocutory injunction.

8. He then continued with his thoughts on how the ‘balance of convenience’ might be decided:
   

It is where there is doubt as to the adequacy of the respective remedies in damages available to either party or to both, that the question of balance of convenience arises. It would be unwise to attempt even to list all the various matters which may need to be taken into consideration in deciding where the balance lies, let alone to suggest the relative weight to be attached to them. These will vary from case to case.

Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo. If the defendant is enjoined temporarily from doing something that he has not done before, the only effect of the interlocutory injunction in the event of his succeeding at the trial is to postpone the date at which he is able to embark on a course of action which he has not previously found it necessary to undertake; whereas to interrupt him in the conduct of an established enterprise would cause much greater inconvenience to him since he would have to start again to establish it in the event of his succeeding at the trial.

Save in the simplest cases, the decision to grant or to refuse an interlocutory injunction will cause to whichever party is unsuccessful on the application some disadvantages which his ultimate success at the trial may show he ought to have been spared and the disadvantages may be such that the recovery of damages to which he would then be entitled either in the action or under the plaintiff's undertaking would not be sufficient to compensate him fully for all of them. The extent to which the disadvantages to each party would be incapable of being compensated in damages in the event of his succeeding at the trial is always a significant factor in assessing where the balance of convenience lies; and if the extent of the uncompensatable disadvantage to each party would not differ widely, it may not be improper to take into account in tipping the balance the relative strength of each party's case as revealed by the affidavit evidence adduced on the hearing of the application. This, however, should be done only where it is apparent on the facts disclosed by evidence as to which there is no credible dispute that the strength of one party's case is disproportionate to that of the other party. The court is not justified in embarking on anything resembling a trial of the action on conflicting affidavits in order to evaluate the strength of either party's case.

9. It is clear from numerous decisions that these principles apply in Fiji.

Analysis

10. It is clear that there is a serious question to be tried. This is a case where the outcome will depend on evidence, and the Court’s findings as to credibility of competing witnesses. In spite of arguments from counsel for the defendant that sought to persuade me that I could make factual findings on the basis of the affidavits, I have no intention of trying to do so. The parties’ positions are diametrically opposed, and there seem to be potential deficiencies in both the plaintiffs’ and the defendant’s cases which can only be resolved at trial after all relevant evidence is presented, and witnesses have been cross-examined.
    
11. It also seems to be the case that the parties have a similar ability to pay damages, should the court confer possession on the party who is ultimately unsuccessful at trial. There was some discussion about whether, in a case like this, damages would provide an adequate remedy, and are readily calculable. Neither party is suggesting that they wish to keep the horse for sentimental reasons, or because it performs an essential role in their family lives, or businesses. It is obvious that its value to them lies in its ability to win prize money at races, and because of its potential to sire other horses which can be sold, or might win more races. It is said to be currently worth $30,000, although there is currently no expert evidence for this, and nor is there evidence about Volcano’s potential future winnings or stud fees. But even if there was such evidence, all of these categories of loss can be compensated for in damages. This is not one of those cases where the party who does not have possession, but ultimately wins his claim, will suffer losses that are impossible to adequately assess in money, or – it seems from the parties’ respective disclosure of their financial positions – that he will be unable to recover from the other side. Furthermore, I assume that since the horse is likely to be racing in races that are conducted in public and are well publicised, and that anyone paying stud fees is likely to want to claim Volcano as the sire for any off-spring, it will be difficult if not impossible to conceal any winnings and stud fees earned by the horse. So on the issue of susceptibility to uncompensatable loss, the position of both parties seems to be similar if not equal.
    
12. It was submitted by the plaintiff – if I understood the argument correctly - that the fact that the defendant has branded the horse with his own brand (in spite of receiving advice from a police officer that he should not do so until the issue of ownership was resolved) shows a recklessness by the defendant for the health of the horse that should disqualify him as a suitable custodian of the horse. With respect to counsel, this argument seems hyperbolic. Although I have no doubt that branding the horse will have caused some discomfort, it is after all no more than what the plaintiff was himself willing to inflict when he put his own brand on the horse. A similar, but even more obscure argument was raised about the apparent intention of the defendant to use the horse for stud purposes. I do not accept that his determination to brand the horse (an arrogant but futile gesture in terms of the contest over ownership), or to put it to stud, shows that the defendant is not to be trusted to care for the animal. The defendant, like the plaintiff, has every incentive to keep the horse in good condition so that he wins as many races, and sires as many foals, as possible. It is also clear that the second plaintiff had sufficient confidence in the defendant’s ability to care for the horse to entrust him with the possession of the horse (albeit – the second plaintiff now says – on a temporary basis) in June 2020. In light of this the plaintiffs’ argument that the horse will be at risk if it remains with the defendant seems rather hollow.
    

Conclusion/Orders

13. As Lord Diplock says in the passage cited above:

Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo.

For the reasons given above, this is one of those cases where the positions of the parties are evenly balanced across the board, not only in relation to the apparent chances of ultimate success, but in terms of the potential impact of depriving the true owner of possession of his horse. In these circumstances I am going to resort to the status quo as the deciding factor, and the application for an order that the horse be returned to the plaintiff is declined at this point. This is not abdicating responsibility for a decision – it merely recognises the decision made by the second plaintiff, for whatever reason, and however much that is now regretted, to give possession of Volcano to the defendant. The plaintiffs (or at least the second plaintiff) trusted him then to care for and manage the horse. Now they will have to do so for a bit longer while this case plays out.

14. However, to help ensure the safety of the horse, and to make any damages, if they arise, more easily calculable, this outcome is subject to the following orders and conditions:
    
    1. I reserve leave to either party to apply again for the return of the horse Volcano on an interim basis, or for other interim custody arrangements for the horse (including a change in these conditions) in the event that new evidence emerges that the horse is at risk in the defendant’s possession, or for any other good reason.
    2. Until further order of the Court the defendant is restrained from selling, disposing of or parting with possession of the horse Volcano, or from moving the horse away from where it is currently kept, except for the temporary purpose of attending races in Fiji.
    3. The defendant is to allow the first plaintiff by himself or his agents (including the second plaintiff, or any veterinary or trainer) to have access to examine the horse Volcano from time to time at the location referred to in (ii) above, as reasonably requested by the first plaintiff.
    4. The defendant is to advise the plaintiffs in advance (with sufficient notice to enable the plaintiffs to attend these events if they wish to do so) and to keep the plaintiffs informed of any races or events that the horse Volcano is entered for, or that are upcoming that he is considering entering the horse for, including any stud services booked for the horse.
    5. Costs are reserved.
       
15. In making these orders it is my intention that the horse will be kept somewhere that is reasonably accessible to the plaintiffs. If this is not currently the case I expect that the horse will be returned to Ba, or where-ever it was kept after the second plaintiff delivered the horse over to the defendant in June 2020. I also note that I do not expect the parties to apply for a variation of these orders unless doing so is reasonably necessary for the preservation and safety of the horse. Unwarranted applications for variations, or to enforce these orders, are likely to be met with orders for costs against the applicant. One issue that I have given thought to is whether it is possible, or practicable to insure the horse. Probably no insurance company knowing of this dispute would be interested in offering cover. However, if either party wants to pursue this option that is something that may be within the scope of the leave reserved in paragraph 14(i) above.
    

__________
A.G. Stuart
Judge

At Lautoka this 24^th day of November, 2020

SOLICITORS:
P. Dayal Lawyers for the Plaintiff
Nazeem Lawyers for the Defendant