Vivrass Development Ltd v Fiji National Provident Fund [2001] FijiLawRp 67; [2001] 1 FLR 260 (10 August 2001)

VIVRASS DEVELOPMENT LTD AND LAUCALA BEACH HOLDINGS LTD v FNPF, RAGG & ASSOCIATES INTERNATIONAL LTD

High Court Civil Jurisdiction

10-11 July, 10 August, 2001

HBC 27/01S

Injunction –– motion to dissolve injunction - injunction earlier granted restraining D1 from proceeding with mortgagee sale or advertising sale – injunction will frustrate civil action claiming order for specific performance of sale of properties to D1 – D1 wearing 2 hats of mortgagor and purchaser – whether affidavits raised triable issues – damages an adequate remedy

The Plaintiffs earlier instituted a civil Action against the Defendants seeking an order for specific performance that D1 purchase P1's property for $4.5 million and that D1 execute all necessary documents. D1 revised its offer downward to $3.134m. That action is being defended. D1 subsequently issued demands under mortgage on both Plaintiffs and had advertising 'mortgagee's sale' of the properties. D1 counsel submitted that the Plaintiffs failed to disclose that at the time of obtaining interim injunction it had already advertised the mortgagee sale of the two companies in a daily newspaper, that there was a winding up action by a bank. Together with the apparent worthless undertaking when the Plaintiffs were unable to pay their debts, D1 counsel submitted these were sufficient to dissolve the interim injunction. Counsel further submitted that proceeding with the mortgagee's sale was in the interests of the Plaintiffs to realize the best value from the security. Plaintiffs' counsel argued that non-disclosure alone was insufficient to avoid an injunction, which should be stopped as the mortgagor had become a purchaser, and it could not have it both ways. The Court examined the principles of injunction, and determined that this was a case where damages are an adequate remedy, that the Plaintiff had not made out a sufficient case why it should stop a mortgagee exercising its power under security documents.

Held – It cannot be so in law that D1 should be restrained from exercising its power of sale when there was sufficient justification for exercising it, when the same property is mortgaged to it, and in a sale and purchase agreement, albeit incomplete. The court will not grant an injunction which would have the effect of helping to break an enforceable security contract, absent any satisfactory and acceptable proposition about repayment, or whether they are prepared to deposit money into Court. The Plaintiff had not made out a sufficient case in support of its application.