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High Court of Fiji |
IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION
Civil Action No. HBC 123 of 2020
BETWEEN
SUSHIL SHARMA LAWYERS a firm of Barristers and Solicitors of Labasa.
FIRST PLAINTIFF
AND
VIKASH KUMAR of Squatter Settlement Newtown, Khalsa Road, Nasinu.
DEFENDANT
Counsel : Mr. Filipe V. for the Plaintiff
Mr. Rattan S. for the Defendant
Date of Hearing : 16th July 2020
Date of Ruling : 07th August 2020
RULING
(On the Applications for Mareva Injunction and Striking Out)
[1] The plaintiffs by their amended statement of claim sought the following reliefs:
[2] The 1st plaintiff on 01st May 2020 filed an ex-parte notice of motion seeking the following orders:
[3] The defendant filed a summons pursuant to Order 18 rule 18(1)(a) of the High court Rules 1988 seeking to have the plaintiff’s statement of claim struck out. In the said summons the defendant sought the following reliefs:
(a) An order under Order 18 rule 18(1)(a)of the High Court rules 1988 and the inherent jurisdiction of the court that the statement of claim be wholly struck out and the plaintiff’s claim against the defendant contained therein be dismissed upon the ground that they disclose no reasonable cause of action;
(b) An order all proceedings be stayed pending the determination of this application; and
(c) The plaintiff herein pays the defendant costs of this application and all incidental costs hereto.
[4] I will first deal with the objection raised by the defendant as to the legality of the affidavits filed on behalf of the plaintiff in support of the Mareva Injunction and the affidavit in opposition filed on 22nd May 2020.
[5] Both these affidavits have been filed by the law clerk of the plaintiff law firm. It is the submission of the defendant that since both affidavits have been affirmed to by the law clerk the court must expunge them. In this regard the learned counsel for the defendant relied on the decision of the Acting Chief Justice in the case of Paul v Director of Lands [2020] FJSC 3; CBV0018.2019 (9 June 2020) where it was held:
When Third Party (including Law Clerks/Legal Executives/Litigation Clerks) depose Affidavit on behalf of a party to the proceedings then he/she:-
(i) must be authorised in writing by that party to depose such Affidavits;
(ii) must depose as to why that party and if a Company than why its director or authorized officer cannot depose the Affidavit;
(iii) must not depose Affidavits on basiinof information or belief but depose facts the deponent has knowledge of those facts except where:
- (a) Affidavit is in support of or in opposition to Application for Summary Judgment;
- (b) Affidavit verifying facts in respect to action for specific performance pursuant to Order 86 of HCR only if directed by Court to do so;
- (c) Affidavit verifying evidence of facts during trial when directed by Court to do so pursuant to Order 38 Rule 3 of HCR.
(iv) may depose Affidavits in support of or in opposition to interlocutory application but must do so on the basis of information received which they believe to be true and must disclose the source of such information or beliefs in addition facts that is within their personal knowledge.
[6] The findings can be applied only to the affidavit signed on 18th June 2020 which subsequent to the decision. Since the other affidavit was signed before this decision these principles are not applicable because the judgments of court becomes effective from the date of its delivery.
[7] In Deo v Singh [2005] FJHC 23; HBC0423.2004 (10 February 2005) it was held:
The swearing of affidavits by solicitor’s clerks in contested proceedings appears with alarming regularity before the courts. Arun Kumar says he was duly authorized by defendants to dispose the contents. There is no authority annexed to the affidavit. Order 41 Rule 1 sub-rule 4 requires affidavit to be expressed in “first pers221;. The affidavit put before the court is more like a statement defence in its wording rather than being expressed in first person. Swearing of affid by solicitor’s clerk on contested matters should be d be a rare exception and the reason why the party is unable to depose ought to be explained.
Mishra Prakash & Associates v Nagan Engineering (Fiji) Ltd [2018] FJHC 198; HBA001.2010 (19 March 2018)
It is trite law that a lawyer’s clerk may not affirm an affidavit intended to be used in a contentious matter in Court. This is indeed a contentious matter where the Respondents are strongly resisting the application for extension of time. The Affidavit should have been affirmed by the Solicitor having personal knowledge of the pertinent matters. More precisely, the deponent should have been the Solicitor who had the conduct and the management of the cause.
What is more, the law clerk deposes “I am duly authorized to swear this Affidavit on behalf of the Appellant”.
I note that the law clerk has no written authorization to affirm the Affidavit. I cannot comprehend the basis on which he was deposing.
[8] In this matter in the affidavit filed in 01st May 2020 it is stated that deponent was authorised by Mr. Sharma to swear the affidavit but there is no written authority attached to the affidavit and in the affidavit filed on 22nd June 2020 it does not say the deponent had the any authority to swear the affidavit. Furthermore, in these affidavits it is not stated as to why any of the partners of the plaintiff law firm could not depose the affidavits in question. Therefore, the court should not consider the facts contain in the said affidavits in its findings.
[9] Since the court decided to expunge the affidavits there is no proper application for an injunction for its consideration. However, the court will consider the application of the plaintiff for Mareva Injunction to see whether there is any merit in the application. In the case of Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2 Lloyd’s Rep. 509 / [1980] 1 All ER 213 Lord Denning said:
If it appears that the debt is due and owing, and there is a danger that the debtor may dispose of his assets so as to defeat it before judgment, the court has jurisdiction in a proper case to grant an interlocutory judgment so as to prevent him disposing of those assets.
Dynasty Rangers v SBSK [2001] 7 CLJ 168 / [2002] MLJ 326:
Mareva Injunction is essentially an interlocutory injunction. Therefore, the elements that a plaintiff needs to establish to obtain a Mareva Injunction are along the lines of any interim injunction – i.e. a prima facie case, balance of convenience and irreparable injury. Over the years, the criteria have been clearly laid down and include:
(1) a cause of action must exist at the time the order is to be granted and the plaintiff must demonstrate a good arguable case;
(2) the defendant must have assets within the jurisdiction of the court;
(3) the balance of convenience must be in favour of the plaintiff being granted the injunction;
(4) the plaintiff must establish that the defendant lacks probity and that there is a real risk of dissipation of assets; and
(5) there has been no delay in applying for the injunction.
The plaintiff in support of its application relied on the following findings of Justice Byrne in the case of Chiou v Wang [1994] FJHC 160; Hbc0466d.94s (31 October 1994):
Since the case which gave its name to Mareva Injunctions was decided, namely Mareva Compania Naviera SA v. International Bulk Carriers SA "The Mareva" 1 All E.R. 213 the rules relating to the granting of such injunctions have become reasonably well defined although I have little doubt that in the course of time they may yet be further enlarged. I will discuss some of these rules when dealing with particular parts of the evidence in this case but two basic propositions are clear:
(i) Any Applicant for a Mareva Injunction must show that so far as the merits of his proposed actions are concerned he has a good arguable case.
(ii) The Defendant has assets within the jurisdiction and there is a real risk that if not restrained he will remove the assets from the jurisdiction or dissipate them within it.
These two basic principles were amplified by Lord Donaldson of Lymington M.R. in his judgment in Polly Peck International plc v. Nadir and Others (No. 2) [1992] EWCA Civ 3; (1992) 4 All E.R. 769 at pp 785-786 and it is appropriate to quote from his judgment here. His Lordship said:
"I therefore turn to the principles underlying the jurisdiction. (1) So far as it lies in their power, the courts will not permit the course of justice to be frustrated by a defendant taking action, the purpose of which is to render nugatory or less effective any judgment or order which the plaintiff may thereafter obtain. (2) It is not the purpose of a Mareva injunction to prevent a defendant acting as he would have acted in the absence of a claim against him. Whilst a defendant who is a natural person can and should be enjoined from indulging in a spending spree undertaken with the intention of dissipating or reducing his assets before the day of judgment, he cannot be required to reduce his ordinary standard of living with a view to putting by sums to satisfy a judgment which may or may not be given in the future. Equally no defendant, whether a natural or a juridical person, can be enjoined in terms which will prevent him from carrying on his business in the ordinary way or from meeting his debts or other obligations as they come due prior to judgment being given in the action. (3) Justice requires that defendants be free to incur and discharge obligations in respect of professional advice and assistance in resisting the plaintiff's claims. (4) It is not the purpose of a Mareva injunction to render the plaintiff a secured creditor, although this may be the result if the defendant offers a third party guarantee or bond in order to avoid such an injunction being imposed. (5) The approach called for by the decision in American Cyanamid Co. v Ethicon Ltd. [1975] UKHL 1; (1975) 1 All E.R. 504, (1975) AC 396 has, as such, no application to the grant or refusal of Mareva injunctions which proceed on principles which are quite different from those applicable to other interlocutory injunctions."
[10] In the statement of claim the plaintiff is seeking to recover $51,843.01 as special damages from the defendant for the legal services rendered to him. However, in the statement of claim or amended statement of claim the plaintiffs have not averred how they arrived at the figure of $51,843.01. It is a requirement in law that special damages must be pleaded and proved but in this case the plaintiffs have failed to plead the special damages claimed.
[11] Mareva Injunction like any other injunction is an equitable remedy granted at the discretion of the court. The burden is on the party who seeks the court to exercise its discretion in his favour, to satisfy the court that there are grounds justifying such an exercise.
[12] In this matter the plaintiffs have averred in the amended statement of claim (paragraph 22) that the conduct of the defendant demonstrates that he is evading the payment of fees for the legal work carried out on his behalf and there is a real risk that the defendant may dissipate his assets and withdraw money from the bank. This averment alone, in my view, is not sufficient for the court to grant an injunction. There must be some material before the court to show that the defendant is making arrangement to dissipate his assets.
[14] The plaintiff cited the decision in Prasad v Carpenters (Fiji) Ltd [2004] FJCA 45; ABU0004.2004S (11 November 2004) where the Court of Appeal held:
In our view the Judge had more than sufficient evidence before him to make the Mareva Injunction. The circumstances of the case entitled the Respondent to the protection afforded by a Mareva injunction against the risk, and in our view the significant risk, given the evidence relating to the withdrawal of around $100,000.00, of the Appellant committing the abuse of dissipating or hiding his assets in order to frustrate the Respondent recovering from him in the event of obtaining a judgment.
[15] It appears from the decision cited above that the court had had sufficient material before it to arrive at the above conclusion. In the matter the court has already decided to disregard the affidavit in support of the application. Hence, there is no material to satisfy the court that there is a real risk of dissipation of assets by the defendant.
[16] Learned counsel for the defendant submitted that in view of the provisions of section 79 of the Legal Practitioners Act which provides;
Every practitioner shall be entitled to sue of the recovery of the practitioner's costs pursuant to any agreement made in accordance with the provisions of this Part, or in the absence of such agreement in accordance with the schedules of fees established by regulation pursuant to this Part, together with any disbursements, in respect of services rendered whether as a legal practitioner.
It shall not be necessary for the practitioner to have such cost taxed prior to instituting proceedings for recovery of those costs. In the absence of taxation no claim may be made by the practitioner for any costs which are, pursuant to such agreement or the appropriate schedule of fees, as the case may be, left to the discretion of the taxing officer.
[17] In Mishra Prakash & Associates v Lautoka General Transport Ltd [2008] FJHC 367; HBC136.2007 (19 December 2008) the Master of the High Court held:
Although S 79(2) dot restrict the filing of g of recovery action for fee by a Practitioner, perhaps in cases of primae contestetested bills, taxapion prior to commencement of action is the approe app to take. Howeverwever, eac, each case must be decided on its own facts.
It was held further:
...there is no agreement at leo prima-facie&#/i> ascerthe reasonableness of s of the fee. Nor is there any evidential foundation for the methodology by which the fee may be calculated. In short, the claim in the writ is unliquidated. By virtue of S 79(2) the bill needs toaxed beforbefore it becomes a liquidated claim.
In Patel v Kant [2015] FJHC 52; HBC16.2011 (26 January 2015) ourt
From Section 79(2) of the Legal Practitioner's Decree even an agreement aent as to s to the costs between the parties, is left to the discretion of the taxing officer. In such a situation the claim in this action, remains unliquidated until the said sum is determined by the taxing officer irrespective of the issue of prior agreement as to the costs between the parties.
18] The plaintiff instiinstituted these proceedings to recover costs but the costs have not been taxed, therefore, it is matter ely within the discretion of the taxing officer.[19] For these reasons the applicatlication for Mareva Injunction must necessarily fail.
[20] I will now move on to consider the application of the made pursuant to Order 18 rule 18(1)(a) of the High Court Rules 1988.
[21] Order 18 rule 18 of the High Court Rules 1988 provides:
(1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the indorsement of any writ in the action, or anything in any pleading or in the indorsement, on the ground that-
(a) it discloses no reasonable cause of action or defence, as the case may be; or
(b) it is scandalous, frivolous or vexatious; or
(c) it may prejudice, embarrass or delay the fair trial of the action; or
(d) it is otherwise an abuse of the process of the court;
and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.
(2) No evidence shall be admissible on an application under paragraph (1)(a).
(3) This rule shall, so far as applicable, apply to an originating summons and a petition as if the summons or petition, as the case may be, were a pleading.
In Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 3) [1970] Ch 506 it was held that the power given to strike out any pleading or any Part of a pleading under this rule is not mandatory but permissive, and confers a discretionary jurisdiction to be exercised having regard to the quality and all the circumstances relating to the offending plea.
In Drummond-Jackson v British Medical Association [1970] 1 W.L.R. 688; [1970] 1 All ER 1094 it was held;
Over a long period of years it has been firmly established by many authorities that the power to strike out a statement of claim as disclosing no reasonable cause of action is a summary power which should be exercised only in plain and obvious cases.
In the case of Walters v Sunday Pictorial Newspapers Limited [1961] 2 All ER 761 it was held:
It is well established that the drastic remedy of striking out a pleading or, part of a pleading, cannot be resorted to unless it is quite clear that the pleading objected to, discloses no arguable case. Indeed, it has been conceded before us that the Rule is applicable only in plain and obvious cases.
In Narawa v Native Land Trust Board [2003] FJHC 302; HBC0232d.1995s (11 July 2003) the court made the flowing observations:
In the context of this case I find the following statement of Megarry V.C. in Gleeson v J. Wippell & Co. [1971] 1 W.L.R. 510 at 518 apt:
“First, there is the well-settled requirement that the jurisdiction to strike out an endorsement or pleading, whether under the rules or under the inherent jurisdiction, should be exercised with great caution, and only in plain and obvious cases that are clear beyond doubt. Second, Zeiss No. 3 [1970] Ch. 506 established that, as had previously been assumed, the jurisdiction under the rules is discretionary; even if the matter is or may be res judicata, it may be better not to strike out the pleadings but to leave the matter to be resolved at the trial”.
[22] From the decisions cited above, it is clear that the courts are discouraged to a very great extend from summarily striking out matters before it.
[23] However, as I have stated above since the plaintiff has not pleaded his claim for special damages and in view of section 79 of the Legal Practitioners Act the plaintiff cannot successfully maintain this action.
ORDERS
Lyone Seneviratne
JUDGE
07th August 2020
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