Ward v Chandra [2011] FJSC 8; CBV0010 (20 April 2011)

SUPREME COURT OF FIJI
CIVIL APPEAL

CBV0010.10
From Court of Appeal ABU0042.08

STEPHEN PATRICK WARD

V

YOGESH CHANDRA

7th, 20th April 2011

Gates, President

RULING ON STAY

Mr C.B. Young for Petitioner [Applicant]
Mr R. Prakash with Ms Karan for Respondent [Respondent]

Introduction

[1] On 23rd February 2011 the Petitioner filed a Notice of Motion for Stay pending determination of his Petition for Special Leave to appeal. He did so pursuant to section 8(1) of the Administration of Justice Decree 2009. This provision follows a similar wording to section 122(2)(b) of the 1997 Constitution.

[2] On 8th March 2011 the affidavit of the Petitioner was filed in support of the Motion and a further affidavit from Kamal Kumar, a solicitor in Mr Young's office, filed on 5th April 2011. The Respondent relied on his own affidavit filed on 9th March 2011 in connection with the fixing of security for costs. The Motion is opposed.

[3] A grant of stay is within the jurisdiction and powers of a single judge to hear and determine [section 11 Supreme Court Act].

[4] The issue for determination is whether the Petitioner's case prior to the hearing is sufficiently exceptional to allow for some interlocutory relief. For at the Supreme Court, that is at final Court of Appeal stage, the hurdles to be overcome for a petitioner seeking special leave are formidable. Sufficiently exceptional may be a stronger test than that favoured in New South Wales where the hurdle was said to be overcome if "the applicant could demonstrate a reason or an appropriate case to warrant the exercise of discretion in its favour": Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 AT P.694; applied in Penrith Whitwater Stadium Ltd & Anor v Lesvos Pty Ltd & Anor [2007] NSWCA 103.

The facts and the Court of Appeal's decision

[5] The case arose out of a land transaction. The Petitioner owned a piece of freehold land at Denarau. On 6th January 2005 he entered into a sale and purchase agreement with the Respondent to sell the land for $F595,000. In pursuance of the agreement the Respondent paid a deposit of F$59,500, the balance being due by 4th March 2005.

[6] By an email to the Respondent's solicitors of the 10th March 2005 the Petitioner's then solicitors offered to extend the date of settlement, which had already passed, from 4th to 24th March 2005. There was a subsequent dispute as to whether that extension had been granted unconditionally. On 21st March 2005, not having heard further, the Petitioner's solicitors wrote again to the Respondent's solicitors saying they had not received any response nor had the stamp duty been tendered. They withdrew their offer to extend the settlement date, and reserved their rights.

[7] On 7th April 2005 the Respondent's solicitors wrote back saying the solicitor dealing with the matter had been ill. They were in funds, and forwarded the cheque for the stamp duty, stating their client wished to proceed. They were in funds ready for completion, and upon the transfer being stamped, settlement could take place.

[8] The same day the Petitioner's solicitors replied and gave notice of rescission. Both the High Court and the Court of Appeal decided that the extension of the settlement date had been invalid since it had failed to comply with clause 15 of the Agreement. In order that the date of settlement be postponed to another date it was necessary under the terms of clause 15 that the date be extended only "if mutually agreed to in writing by both the vendor and purchaser". The Respondent had not accepted the offer to extend in writing.

[9] The Court of Appeal applied the principle that a vendor-purchaser contract imposes mutual and concurrent obligations on both parties in which the vendor must convey title and the purchaser must pay the contract price: Foran v Wight [1989] HCA 51; (1989) 168 CLR 385. Arising out of these obligations, the vendor must be ready to settle. In this case the vendor had not been ready with a stamped transfer by 4th March 2005, the day fixed for settlement, and there was the question of land sales tax to pay, since the vendor was a foreign resident. For both reasons it was held the vendor was not ready to settle on 4th March 2005.

[10] For the lack of readiness to settle on the due date the Court of Appeal concluded that the vendor's rescission was invalid. The court also found that the vendor had elected to affirm the contract, and thus lost his right to rescind, or more accurately, his right to terminate.

[11] The Court of Appeal ordered the award of equitable damages, specific performance after the sale of the property to another no longer being an available remedy. It ordered that such damages be assessed by the Master. The Master had fixed 13th April 2011 for the hearing of the assessment.

The stay application

[12] An oral invitation to this court was made that an interim stay be granted deferring this assessment until the court could rule on the stay application. Such interim stay was granted at the hearing on 7th April 2011, including an interim stay on any further proceedings, pending this ruling. Counsel settling the papers seeking stay relief would be wise to include this relief in the Notice of Motion. The Respondent is entitled to notice of this additional order sought and may wish to address the order in affidavit material.

[13] The Petitioner in his affidavit in support of stay stated that the Master had fixed the 8th March 2011 as the date he would hear the assessment of damages. For an overseas litigant no doubt attendance would involve a greater expense than for a local resident. If the Petitioner were successful with his special petition, it would also be an additional expense and one he would seek to avoid. The Respondent, successful in the Court of Appeal, is within his rights in not agreeing to a stay on the assessment and any enforcement thereafter.

[14] Besides cost, the Petitioner deposes to the possibility of further appeal, this time against the assessment. Until the special petition to this court is disposed of, there is no finality on liability either.

[15] In his affidavit the Respondent refers to the likelihood of damages being substantial, involving an assessment from 23rd November 2005 to 18th November 2010. He says the property was eventually sold for F$1.1 million, and that the Petitioner is not a citizen of Fiji. By that he is no doubt wishing it to be inferred that the execution of a damages judgment will prove difficult. Apart from keeping the Respondent out of his award, when made, I am not sure if this reflects relevantly on the stay issue.

[16] The Respondent goes on to depose that there is no merit in the appeal and that the stay application is a delaying tactic. The Respondent suggests $700,000 be paid into court by the Petitioner as sufficient security for any damages awarded. No evidence has been adduced as to the range within which damages may fall, for the loss of profit on resale, interest, expenses and costs had the sale to the Respondent gone through.

Principles governing a stay application

[17] In arriving at a decision as to whether the Petitioner's circumstances are sufficiently exceptional for the grant of stay relief pending appeal, it is necessary to consider the relevant principles set out in the Court of Appeal in Natural Waters of Viti Ltd v Crystal Clear Mineral Water (Fiji) Ltd Civil Appeal ABU0011.04S, 18th March 2005. They were:

"(a) Whether, if no stay is granted, the applicant's right of appeal will be rendered nugatory (this is not determinative). See Philip Morris (NZ) Ltd v Liggett & Myers Tobacco Co (NZ) Ltd [1977] 2 NZLR 41 (CA).

(b) Whether the successful party will be injuriously affected by the stay.

(c) The bona fides of the applicants as to the prosecution of the appeal.

(d) The effect on third parties.

(e) The novelty and importance of questions involved.

(f) The public interest in the proceeding.

(g) The overall balance of convenience and the status quo."

[18] This petition is likely to be listed in the August sittings of this court which will take place between 2nd to 12th August 2011. Assuming for a minute that the Master is able to relist, hear, and deliver judgment on the assessment all within 3 months, enforcement is unlikely to arise prior to the Supreme Court's hearing and perhaps judgment. Mr Young has been unable to demonstrate that his client's appeal will be rendered nugatory if the assessment goes ahead or even if the award is paid out to the Respondent. For instance the affidavit material has not condescended to particulars showing that if damages are paid out to the Respondent there is no prospect of the Petitioner, if successful with his petition, being able to get back his money: Barker v Lavery [1885] UKLawRpKQB 32; (1885) 14 QBD 769.

[19] But nor has evidence been adduced or referred to that the Respondent, the successful party below, will be injuriously affected if a stay were granted. The sale and purchase agreement was signed up by the parties in 2005 and the dispute arose within 2 months. There is the obvious disadvantage of a delay in achieving as he sees it his compensation for wrongful interpretation of the contractual agreement. Such losses may well be recoverable at the assessment. This is not shown to be a case where a stay is required in order to preserve the subject matter of the litigation: per Brennan J in Jennings Construction Ltd v Burgundy Investments Pty Ltd No. 1 [1968] 161 CLR 685. No dire consequences are alleged to flow from the lack of stay. Nor will either party face ruin without a stay: Linotype-Hell Finance Ltd v Baker [1992] 4 All E.R. 887.

[20] In considering stay principle (c) above, I have no doubt that the Petitioner is bona fide in taking up this appeal and will prosecute it with sufficient expedition. Though appeals do interrupt the remedies a successful litigant has achieved, nowadays appeal courts will be vigilant to guard against delay, whether deliberate or negligent. Appeal courts have moved towards a system of case management. Though Fiji personally has a shortage of judges at the appellate level, that situation will gradually improve as more judges are appointed to the panels. The appeal courts will be careful to ensure that an appellant or petitioner does not 'park' his litigation in the appeal court, without prosecution, for purposes of delay or for the avoidance of confirmed indebtedness.

[21] In Iftakhar Iqbal Khan v Michael Fenech CBV0002.05S (4 May 2005) Ward JA in this court said (at p.4) in relation to stay:

"Execution in this case is payment of a sum of money. Only in the rarest of cases is that sufficient to justify a stay as subsequent success in the appeal will be implemented by repayment to the appellant. This is not a case of performance or restraint of some action or destruction of property which will irreversibly change the status quo and render a successful appeal nugatory. The description in the petitioner's affidavit of the consequence of having to pay before the application for special leave is heard is insufficient to meet that test."

[22] Principle (d) is not relevant to this application.

[23] Principle (e) can be answered by saying that there is little of novelty here. There is some novelty, at least in this jurisdiction in the ground concerning non-referral by the Court of Appeal in the text of its judgment to extra-submissions which had been asked for on a specific point. It has been said by various Courts of Appeal that each ground should be ruled on by the courts below so that a decision on the matter is available for consideration by the next tier appellate court. The argument, if developed in the Supreme Court, could assume greater significance. At this stage, provisionally, this ground as well as the alleged misinterpretation of the significance of the facts in the enactment of the agreement as regards rescission, appear to be neither sufficiently novel or of an importance to a wider audience than that of the two litigants locked in dispute [Principle (f)].

[24] This is not to say that the grounds are not arguable. Various tests have been applied: "a substantial prospect that special leave will be granted": Jennings Construction (supra), "a real chance" per McHugh in Collier v Sengos [1993] 67 ALJR 810 and "a significant prospect" per Mason CJ in Evans v CBPC Ltd [1993] 68 ALJR 175. Sometimes the test has been "every chance of success".

[25] In Atul Kumar Ambalal Patel v Krishna Murti (unreported) Civil Action HBC0225.99L in ruling against the grant of a stay, the High Court stated at pages 2-3:

"Once successful, the litigant should not lightly be deprived of the fruits of his successful litigation: The Annot Lyle [1886] UKLawRpPro 31; (1886) 11 P.D. 114 at 116CA; Monk v. Bartram (1891) 1 AB 346. The power of the Court to grant a stay is discretionary. The Attorney-General v. Emerson and Others (1890 24 QBC 56; and it is "an unfettered discretion" Winchester Cigarette Machinery Ltd v. Payne and Anor. (No. 2) (1993) TLR 647 AT 648.

If a stay was not granted by the Court at the time of making the order now appealed against, the applicant must show that special circumstances exist as to why a stay should now be imposed, and the successful litigant in effect held back from his remedy" Tuck v Southern Counties Deposit Bank [1889] UKLawRpCh 149; (1889) 42 Ch.D. 471 at 478 per Kay J; Atkins v. G.W. Railway (1886) 2 TLR 400; Barker v. Lavery (1885) 14 QBD 760. In the Winchester Cigarette case (supra) at 648 Lord Justice Hobhouse put it "The appellant had to show some special circumstances which took the case out of the ordinary."

[26] That summary was cited with approval by this Court in Prem Singh v Krishna Prasad and Anor. CDV0001.02S 25th April 2002.

Threshold criteria for special leave

[27] The next consideration for the grant of stay is whether there is likelihood of the Petitioner achieving special leave for his petition.

[28] Section 7(3) of the Supreme Court Act inhibits the Court by stating:

" (3) In relation to a civil matter (including a matter involving a constitutional question), the Supreme Court must not grant special leave to appeal unless the case raises---

(a) a far-reaching question of law;

(b) a matter of great general or public importance;

(c) a matter that is otherwise of substantial general interest to the administration of civil justice."

[29] Even if the Court were to agree with Mr Young's contended interpretation of the facts and his client's rights in rescission, would those factors alone open the door to special leave under the strictures of section 7(3)? At this stage, without detailed argument, both on his grounds and on the leave criteria, I am left in doubt.

[30] Viscount Haldane in Albright v Hydro Electric Power Commission [1923] AC 167 at p.169 in delivering the judgment of the Privy Council said:

"It has been the policy of their Lordships' Board not to entertain applications which will prevent the decision of the Supreme Court being final on general questions connected with the mere construction of agreements which do not raise either far-reaching questions of law or matters of dominant public importance. Here there was an individual agreement; it may have been construed rightly or wrongly by the Supreme Court of Canada, but it is an individual agreement, and the decision turned upon a question of construction."

[31] In these circumstances therefore I must decline to order a stay.

A.H.C.T. Gates
President

Solicitors for the Petitioner : Messrs Young & Associates, Lautoka
Solicitors for the Respondent: Messrs Mishra Prakash & Associates, Lautoka