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High Court of Fiji |
IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION
Civil Action No. HBC 229 of 2016
AND:
BALAGA BAY FARMS (FIJI) LIMITED
APLICANT/PLAINTIFF
AND:
RAVINDRA KUMAR LAL
FIRST RESPONDENT/DEFENDANT
ITAUKEI LAND TRUST BOARD
SECOND RESPONDENT/DEFENDENT
FREDERICK QUAI HOI
THIRD PARTY
BEFORE:
Hon. Acting Chief Justice Kamal Kumar
COUNSEL:
Ms L. Vaurasi for the Applicant/Plaintiff and Third Party
Mr A. Sen for the First Respondent/Defendant
Ms L. Komaitai for the Second Respondent/Defendant
DATE OF RULING:
26 May 2020
RULING
(Application for Interlocutory Injunction)
1.0 INTRODUCTION
1.1 On 9 September 2016, Plaintiff filed Writ of Summons with Statement of Claim against the First Defendant and the Second Defendant.
1.2 On the same day Applicant filed Notice of Motion seeking interlocutory injunction (“Notice of Motion”).
1.3 On 16 September 2016, being returnable date of Notice of Motion, Plaintiff was given time to serve First Defendant and on 28 September 2016, time for service was extended to 7 October 2016, and then to 24 October 2016.
1.3 On 25 October 2016, parties were directed to file Affidavits and Notice of Motion was adjourned to 21 November 2016, to fix hearing date.
1.4 On 21 November 2016, Notice of Motion was adjourned to 22 November 2016, to fix hearing date before a Judge.
1.5 On 22 November 2016, Notice of Motion was adjourned to 28 November 2016, for Mention before a Judge.
1.6 On 28 November 2016, Leave was granted to First Defendant to file and serve Amended Statement of Defence by 2 December 2016, with liberty for Plaintiff to file Reply by 16 December 2016.
1.7 On the same day parties were directed to file Submissions and Leave was granted for Plaintiff to file Supplementary Affidavits with liberty for First Defendant to file Affidavit in Response.
1.8 On 18 January 2017, after the Court pointed out the defects in Notice of Motion in not describing details of the property, Plaintiff sought Leave to file Amended Notice of Motion, which Leave was granted.
1.9 Injunction Application was adjourned to 20 January 2017, for hearing.
1.10 On 19 January 2017, Plaintiff (hereinafter referred to as “The Applicant”) filed Amended Notice of Motion seeking following Orders:-
(i) An order restraining the First Defendant, his servants or agents from transferring, selling, disposing, destroying or otherwise dealing with any asset bought with the funds sent to him by Emmett Morgan the investor directly or through the Plaintiff Balaga Bay Farms (Fiji) Ltd.
(ii) An order restraining the First Defendant, his servants or agents from killing, selling or removing or in any dealing with any sheep currently on the Land known as Naravuka SD Stage 2 in the Tikina of Wailevu West, Province of Cakaudrove containing an area of 65.2724 Hectares and their progeny until further orders of this Court.
(iii) The First Defendant is restrained by himself or his servants or agents from removing any machinery, buildings, building materials, fencing or other improvements from the Land known as Naravuka SD Stage 2 in the Tikina of Wailevu West, Province of Cakaudrove containing an area of 65.2724 Hectares, until further orders of this Court.
(iv) An order that the Plaintiff’s agents be permitted to enter the Land known as Naravuka SD Stage 2 in the Tikina of Wailevu West, Province of Cakaudrove containing an area of 65.2724 Hectares to the First Defendant at any time and count the sheep on the Land known as Naravuka SD Stage 2 in the Tikina of Wailevu West, Province of Cakaudrove containing an area of 65.2724 Hectares to the First Defendant and provide an inventory to the court of the machinery, building materials and building and any other improvements on the land after every such visit.
(v) An order restraining the 2nd Defendant, iTaukei Land Trust Board, his servants or agents from issuing a Lease over the Land known as Naravuka SD Stage 2 in the Tikina of Wailevu West, Province of Cakaudrove containing an area of 65.2724 Hectares to the First Defendant or any other person or entity until further orders of this Court.”
(“the Application”)
1.11 On 21 January 2017, Counsel for Applicant and First Defendant (hereinafter referred to as First Respondent) made Submissions, when Court adjourned the Application for Ruling on Notice and granted Interim Orders in following terms:-
“A. Interim Order is granted in respect to prayers (i) to (vi) of amended Inter Partes Notice of Motion dated 19th January 2017;
(i) The First Defendant, his servants or agents are restrained from transferring, selling, disposing, destroying or otherwise dealing with any asset bought with the funds sent to him by Emmett Morgan the Investor directly or through the Plaintiff, Balaga Bay Farms (Fiji) Ltd.
(ii) The First Defendant, his servants or agents are restrained from killing, selling or removing or in any way dealing with any sheep currently on the land known as Naravuka SD Stage 2 in the Tikina of Wailevu West, Province of Cakaudrove containing an area of 65.2724 Hectares and their property until further orders of this Court.
(iii) The First Defendant is restrained by himself or his servants or agents from removing any machinery, buildings, building materials, fencing or other improvements from the Land known as Naravuka SD Stage 2 in the Tikina of Wailevu West, Province of Cakaudrove containing an area of 65.2724 Hectares, until further orders of this court.
(iv) That the Plaintiff’s agents be permitted to enter the Land known as Naravuka SD Stage 2 in the Tikina of Wailevu West, Province of Cakaudrove containing an area of 65.2724 Hectares to the First Defendant at any time and count the sheep on the Land known as Naravuka SD Stage 2 in the Tikina of Wailevu West, Province of Cakaudrove containing an area of 65.2724 Hectares to the First Defendant and provide an inventory to the court of the machinery, building materials and building and any other improvements on the land after every such visit.
(v) The 2nd Defendant, iTaukei Land Trust Board, his servants or agents are restrained from issuing a Lease over the Land known as Naravuka SD Stage 2 in the Tikina of Wailevu West, Province of Cakaudrove containing an area of 65.2724 Hectares to the First Defendant or any other person or entity until further order of this Court;
(vi) The ANZ Bank is to freeze the First Defendants bank account Number 05497494 at the Savusavu Branch of the ANZ Bank until further orders of the Court.
Plaintiff’s agents enter upon land known as Naravuka SD Stage 2 in the Tikina of Wailevu West, Province of Cakaudrove containing an area of 65.2724 Hectares on last Friday of every month between 8.00am to 6.00pm.”
1.12 Following Affidavits were filed on behalf of the Parties:-
For Applicants
(i) Affidavit in Support of Frederick Quai Hoi sworn on 8 September 2016, and filed on 9 September 2016 (hereinafter referred as “Frederick’s 1st Affidavit”);
(ii) Affidavit in Reply of Frederick Quai Hoi sworn on 17 November 2016, and filed on 18 November 2016 (hereinafter referred to as “Frederick’s 2nd Affidavit”).
(iii) Supplementary Affidavit of Frederick Quai Hoi sworn on 1 December 2016, and filed on 2 December 2016 (hereinafter referred to as “Frederick’s Supplementary Affidavit”).
For First Respondent
Affidavit in Opposition of First Respondent sworn on 7 November 2016, and filed on 8 November 2016 (hereinafter referred to as “First Respondent’s Affidavit”);
2.0 Preliminary Issue
2.1 First Respondent at paragraph 3 of First Respondent’s Affidavit object to Frederick’s 1st Affidavit being used for failure to comply with rules of this Court.
2.2 Order 41 Rule 9 of High Court Rules (HCR) provides as follows:-
“9.-(1) Except as otherwise provided by these Rules, every affidavit must be filed in the Registry.
(2) Every affidavit must be indorsed with a note showing on whose behalf it is filed and the dates of swearing and filing, and an affidavit which is not so indorsed may not be filed or used without the leave of the Court.”
2.3 This Court time and again have raised its concern in relation to non-compliance of Order 41 Rule 9 of HCR.
2.4 In the matter of Kim Industries Ltd. (Unreported) Lautoka High Court Winding – Up Action No. HBF0036 of 1999L, his Lordship Justice Gates (as then he was), the Current Chief Justice stated as follows:
“If any Affidavit bears an irregularity in its form such as the Omission of the endorsement note, leave must be obtained from the Court for it to be filed or used...” (page 3)
2.5 Similar comments were made by his Lordship in State v H.E. The President & Ors. (unreported) Lautoka High Court Judicial Review No. HBJ007 / 2000L 12 October 2000. Chandrika Prasad v Republic of Fiji (unreported) Lautoka High Court Action No. HBC0217 / 2000L [Ruling on Stay Application – 20 December 2000, Ruling on Joinder Application – 17 January 2001].
In Jokapeci Koroi & Ors. v Commissioner of Inland Revenue & Anor. (unreported) Lautoka High Court Action No. HBC179/2001L (24 August 2001) his Lordship Justice Gates (as then he was) and Current Chief Justice removed two (2) Affidavits filed on behalf of the Defendants from the Court file for failure to comply with the order 41 Rule 9 (2) and ordered the Defendants file the said Affidavit with endorsement in compliance with Order 41 Rule 9(2) within 14 days. His Lordship at page 4 of the Judgment stated as follows:
“These mistakes are of little consequence to the actual litigation but since the setting of the format of an Affidavit, vehicle for the presentation of sufficient evidence to the Court, is a relatively simple exercise, these errors should no longer persist.”
2.6 It appears that Applicant’s Solicitors realised the mistake when pointed out by First Respondent as appears from Frederick’s 2nd and Supplementary Affidavit which carries the indorsement in compliance with Order 41 Rule 9 of HCR.
2.7 This Court in exercise of its discretion will consider Frederick’s 1st Affidavit.
3.0 APPLICATION FOR INTERLOCUTORY INJUNCTION
3.1 Counsel for Applicant and First Respondent relied on the principle stated by Lord Diplock in American Cyanamid Co. v. Ethicon Ltd [1975] UKHL 1; [1975] AC 396 which are:-
(i) Whether there is a serious question to be tried;
(ii) Whether damages would be adequate remedy; and
(iii) Whether balance of convenience favors granting or refusing Interlocutory Injunction.
3.2 It is well established that the jurisdiction to either grant or refuse interlocutory injunctions is discretionary.
3.3 Lord Diplock in American Cyanamid v. Ethicon Ltd [1975] UKHL 1; [1975] AC 396 stated as follows:-
“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 19th 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 be plaintiff against injury by violation of his right for which he could not be adequately 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 of 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.”
3.4 In Series 5 Software v. Clarke [1996] 1 All E.R. 853 Justice Laddie stated that the proper approach in dealing with Application for Interlocutory Injunction:
“(1) The grant of an interim injunction is a matter of discretion and depends on all the facts of the case. (2) There are no fixed rules as to when an injunction should or should not be granted. The relief must be kept flexible. (3) Because of the practice adopted on the hearing of applications for interim relief, the court should rarely attempt to resolve complex issues of fact or law. (4) Major factors the court can bear in mind are (a) the extent to which damages are likely to be an adequate remedy for each party and the ability of the other party to pay, (b) the balance of convenience, (c) the maintenance of the status quo, and (d) any clear view the court may reach as to the relative strength of the parties’ cases.”
3.5 Another factor which Courts now take into consideration in addition to the above is “overall justice” as stated by His Honour Justice Cook in Klissers Farmhouse Bakeries Ltd v. Harvest Bakeries Ltd [1985] NZCA 70; [1985] 2 NZLR 129 at 142 (paragraphs 20-30):-
“Whether there is a serious question to be tried and the balance of convenience are two broad questions providing an accepted framework for approaching these applications ... the balance of convenience can have a very wide ambit. In any event the two heads are not exhaustive. Marshalling considerations under them is an aid to determining, as regards the grant or refusal of an interim injunction, where the overall justice lies. In every case the judge has finally to stand back and ask himself that question. At this final stage, if he has found the balance of convenience overwhelmingly all very clearly one way ... it will usually be right to be guided accordingly. But if on the other hand several considerations are still fairly evenly posed, regard to the relative strengths of the cases of the parties will usually be appropriate. We use the word “usually” deliberately and do not attempt any more precise formula: an interlocutory decision of this kind is essentially discretionary and its solution cannot be governed and is not much simplified by generalities.”
Serious Question To Be Tried
3.6 The Application for Interlocutory Injunction must establish that there is a serious question to be tried.
3.7 It is well established that the test for serious question to be taken is that the evidence produced to Court must show that Applicant’s claim is not frivolous, vexatious or hopeless.
3.8 In American Cyanamid Lord Diplock stated as follows:-
“In those cases where the legal rights of the parties depend upon facts that are in dispute between them, the evidence available to the court at the hearing of an application for an interlocutory injunction is incomplete. It is given on affidavit and has not been tested by oral examination.” (p 406)
“It is not part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence in 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.” (p 407)
3.9 His Lordship further stated as follows:-
“In view of the fact that there are serious questions to be tried upon which the available evidence is incomplete, conflicting and untested, to express an opinion now as to the prospects of success of either party would only be embarrassing to the judge who will have eventually to try the case.”
3.10 Applicant was registered as a limited liability company in Fiji on 12 April 2013, with the main objective of entering into and carrying on farming business and create new method of farming in such areas as directors may find suitable.
3.11 Plaintiff’s shareholding at commencement of its business was as follows:-
(i) Aliki Benjamin (law clerk) holding one share in trust for the American Investor Emmett Morgan pending Investment Fiji approval.
(ii) Ravin Lal (First Respondent) holding one unpaid share.
(iii) Peter Russel holding one unpaid share.
3.12 On 22 March 2016, Investment Fiji granted Foreign Investment Registration Certificate (“FIRC”) to Plaintiff to carry on business of “commercial sheep farming”.
3.13 At the meeting allegedly held on 9 March 2016, where it was resolved that:-
(i) Shekinah Law act as Applicant’s Legal Counsel
(ii) Shekinah Law seek regularization of Emmett Morgan’s shareholding in the Applicant by obtaining FIRC.
(iii) First Respondent be removed as Company Secretary and Frederick Quai Hoi be appointed as Company Secretary.
3.14 On 6 May 2016, Applicant’s Solicitors wrote to First Respondent informing him that:-
(i) He has been removed as Company Secretary;
(ii) Directors meeting will be called on 31 May 2016, and removal of him as director of Applicant is a proposed agenda item.
3.15 As alleged at 31 May 2016, it was resolved that:-
(i) Emmett Morgan be appointed as Director/Shekinah Law having regularized his shareholding;
(ii) First Respondent be removed as Director of Applicant;
(iii) Emmett Morgan be issued 9997 shares in the Applicant at $1.00 per share.
3.16 First Respondent asserts that:-
(i) Him as Company Secretary should seek FIRC from Investment Fiji and whoever has done it, has done so unlawfully;
(ii) He did not attend any of the meetings and as such any resolution passed at the meeting is of no effect.
3.17 Applicant and the Investor Emmett Morgan signed a Memorandum of Understanding (“MOU”) with Applicant to lend money to Applicant as a start-up capital.
3.18 First Respondent in his Amended Statement of Defence states that MOU does not give property interest over his assets.
3.19 Applicant claims that Emmett Morgan as an investor sent US$74,200.60 into First Respondent’s personal account between February 2013 and March 2014.
3.20 First Respondent accepts that certain monies were sent to his account which he says was for setting up of Poultry Farm which Poultry Farm was set up and operated successfully for a year but was closed on instructions of Emmett Morgan.
3.21 Applicant in its claim alleges that from those monies, First Respondent purchased a Toyota Hilux Registration No. FB 680 (“MV FB 680”) for $35,000.00.
3.22 In response First Respondent admits purchasing MV FB 680 and stated that he paid $15,000.00 deposit which was given to him by Emmett Morgan as a gift and borrowed rest from Home Finance.
3.23 Applicant stated that once Applicant’s Bank Account at Bank of South Pacific was operational a sum of FJD$73,319.67 was transferred to Applicant’s account which was operated by First Respondent only.
3.24 First Respondent accepts that certain monies were sent to Applicant’s account by Emmett Morgan, the Investor.
3.25 Applicant alleges that Applicant was to acquire Lease over the Farm in its name but First Respondent applied for Lease over land known as Naravuka SD Stage 2 in the Tikina of Wailevu West, Province of Cakaudrove containing an area of 65.2724 Hectares (“the Farm”) in his own name.
3.26 It is not disputed that the fees of $10,211.95 for lease over the Farm was paid by First Respondent to Second Respondent from Applicant’s account.
3.27 For obvious reasons, the parties have been subject to legal proceedings since 2015, and the Applicant has not been able to properly operate its business.
3.28 Applicant has pleaded several causes of action including conversion, breach of fiduciary duties, breach of statutory duty and that Second Respondent issue land over the Farm in Applicant’s name.
3.29 This Court after analyzing the pleadings and Affidavit evidence holds that Applicant’s claim is not frivolous or vexatious and as such there are serious questions to be tried.
3.30 Some of the issues that need to be determined at trial are:-
(i) Whether First Defendant was to use the monies sent to him and Applicant’s account for setting up Sheep Farm for the Applicant?
(ii) Whether Investor’s shareholding in Applicant is in breach of s10 of Exchange Control Act 1950.
(iii) If so, whether subsequent rectification validated his shareholding?
(iv) Whether First Respondent was lawfully removed as Applicant’s Secretary and Director?
(v) Whether First Respondent unlawfully converted monies sent to him by the Investor and Applicant for his own use and benefit?
(vi) Whether First Respondent owed fiduciary duty to the Applicant and/or its shareholders?
(vii) It so, whether he breached that duty?
(viii) Whether lease over the Farm is to be issued to Applicant or First Respondent by Second Respondent?
Whether Damages would be Adequate Remedy
3.31 It is no doubt that the claim for conversion of monies sent to Applicant’s account and/or for the purpose of Applicant can be easily quantified.
3.32 It is questionable whether damages can be quantified for Applicant to have the Farm lease issued in its name and setting of the Sheep Farm using new methods of farming which was one of the objectives of Applicant.
Balance of Convenience
3.33 Frederick Quai Hoi has given undertaking as to damages on behalf of Plaintiff.
3.34 Frederick Quai hoi has failed to provide any evidence of his assets in Fiji to support his undertaking.
3.35 Emmett Morgan also proved his personal undertaking as to damages and in support he stated that he has funds in Fiji and owns a vessel named Kalokalo Ni Viti valued at about $120,000.00
This Court fails to understand as why Emmett Morgan’s Affidavit of undertaking as to damages is not filed with the Application but annexed to Frederick’s 1st Affidavit (Annexure “C”).
This practice is totally inappropriate and should not continue.
In this instance, Court in exercise of discretion will accept Emmett Morgan’s Affidavit of Undertaking.
3.36 This Court also takes note that iTaukei Land Trust Board on 4 August 2015, wrote to Penijami R. Lomaloma Esq., the then Solicitor for Applicant that Board will not issue the lease over the Farm until Case No. HBC 26 of 2015 has been fully adjudicated and decided by the High Court.
3.37 This Court takes this letter as evidence that no lease has been issued by TLTB over the Farm land.
3.38 This after analyzing the Affidavit evidence holds balance of convenience and interest of justice demands that interlocutory injunction be granted.
Conclusion
3.39 This Court holds that there is serious question to be tried and assessing balance of convenience is of the view that Order in terms of prayers (i), (ii), (iii), (iv) and (v) of the Application in modified form be granted.
4.0 Costs
4.1 This Court takes into consideration that Applicant and First Respondent filed Affidavits, Submissions and made Oral Submissions.
5.0 Res Judicata
5.1 First Respondent submitted that because the Application for Interlocutory was dismissed in Civil Action No. 261 of 2015 was declined, Applicant’s Application in this action is caught by doctrine of res judicata.
5.2 The main reason for this Court to dismiss the Application for Interlocutory Injunction in Civil Action No. 261 of 2015 was that First Plaintiff’s shareholding in Second Plaintiff (Applicant in this action) was invalid and as such he could not join Second Plaintiff as a Plaintiff in that proceeding.
5.3 This Court is at Interlocutory stage and as such the issue in this action has not been fully determined by any Court.
5.4 Accordingly, the Application is not caught by doctrine of Res Judicata.
6.0 Orders
6.1 I make following Orders:-
(i) First Respondent (First Defendant) whether by himself, his servants or agents is restrained from transferring, selling, disposing, destroying or otherwise dealing with any asset bought with the funds sent to him by Emmett Morgan the investor directly or through the Applicant (Plaintiff), Balaga Bay Farms (Fiji) Ltd. including but not limited to motor vehicle Registration No. FB 680.
(ii) The First Respondent (First Defendant) is restrained by himself or his servants or agents from removing any machinery, buildings, building materials, fencing or other improvements from the Land known as Naravuka SD Stage 2 in the Tikina of Wailevu West, Province of Cakaudrove containing an area of 65.2724 Hectares, until further order of this Court.
(iii) First Respondent (First Defendant) file and serve Affidavit disclosing all the assets, equipment and items bought from monies transferred to him by Investor Emmett Morgan or from monies held in Applicant’s Bank Account at Bank of South Pacific within twenty-one (21) days from date of this Ruling.
(iv) An order restraining the Second Respondent (Second Defendant), iTaukei Land Trust Board, its employees, servants or agents from issuing a Lease over the Land known as Naravuka SD Stage 2 in the Tikina of Wailevu West, Province of Cakaudrove containing an area of 65.2724 Hectares to the First Respondent (First Defendant) or any other person or entity until further order of this Court.
(v) Cost of Application for Interlocutory Injunction be costs in the cause.
.........................
K. Kumar
ACTING CHIEF JUSTICE
At Suva
26 May 2020
Solicitors:
Shekinah Law for the Applicant/Plaintiff and Third Party
Maqbool & Co. for the First Respondent/First Defendant
In-house Lawyers for the Second Respondent/Second Defendant
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