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Fakafanua v Nishi Trading Ltd [2020] TOLC 15; LA 25 of 2019 (5 May 2020)

IN THE LAND COURT OF TONGA
NUKU’ALOFA REGISTRY

LA 25 of 2019




BETWEEN:


KISIONE FAKAFANUA
Plaintiff


-and-


NISHI TRADING LIMITED
Defendant



Plaintiff’s application for interlocutory injunction


RULING


BEFORE:
LORD CHIEF JUSTICE WHITTEN
Counsel:
Mr V. Mo’ale for the Plaintiff
Mrs D. Stephenson for the Defendant
Dates of hearing:
6 December 2019, 13 January 2020, 19 March 2020
Further submissions:
Date of ruling:
26 March 2020, 7 April 2020
5 May 2020

Introduction

  1. The Plaintiff commenced these proceedings on 31 October 2019. He claims compensation for alleged encroachment by the Defendant and removal of topsoil and rocks from the Plaintiff’s tax allotment at Ma’ufanga.
  2. The same day, the Plaintiff filed an application for injunction by which he sought an order, relevantly, that:
"The manager, employees, staff and any person associated with Nishi trading Ltd carrying on activities at Pili Quarry is hereby restrained from doing any quarry, crushing of uncrossed rocks and similar activities in Pili Quarry until further notice of the court".

Statement of Claim

  1. In the Statement of Claim, the Plaintiff alleged, in summary, that:

Evidence and submissions on the application

  1. The injunction application was heard over a number of occasions between 6 December 2019 and 19 March 2020 with further and final written submissions being filed on 27 March 2020 and 7 April 2020.
  2. In order to understand the evolution of issues raised on the application, and those which remain for determination, it is necessary to trace and recount the course of evidence by affidavits filed and submissions made between and at the various hearings.

30 October 2019

  1. The injunction application was filed with a number of affidavits.
  2. In his affidavit, the Plaintiff generally confirmed most of the allegations in the Statement of Claim. Throughout, the Plaintiff referred to the subject land as being "the applicant's lands". He deposed that in August 2016, a misunderstanding arose between the parties whereby the Plaintiff alleged that the Defendant “had trespassed and converted uncrushed rocks from the quarry”. He asked for an account from the Defendant of the truckloads of rocks it had quarried since August 2016. In September 2018, he had his then lawyer send a letter to the Defendant "telling them to pay up for the alleged rocks that have been quarried" but that the Defendant refused to pay. A similar demand was made in October 2019 which was supported by the two comparative aerial photographs again demanding a "payout" for the rocks that had been unlawfully quarried. Again, the Defendant denied any unlawful activity. Between paragraphs 12 and 18, the Plaintiff deposed that:
  3. The Plaintiff gave the usual undertaking as to damages.
  4. Veikoso Taukei was involved in the erection of the boundary fence in August 2016. He deposed that the fence was erected after surveyors confirmed the boundaries “with stones”. On 11 September 2018, he went with the Plaintiff to the quarry and found that the fence was no longer in place. He deposed that there were "signs of excavating of stones at the area adjoining (the Plaintiff's) land with the quarry where the fence was erected in August 2016". He heard the Defendant’s staff say that they were operating within their boundary and that the fence was erected within their lease.

22 November 2019

  1. On 22 November 2019, the Defendant filed its notice of, and affidavits in, opposition to the application.
  2. The grounds of opposition included there is no question to be tried, the balance of convenience was against the granting of the injunction and that the overall justice dictated that the application be dismissed.
  3. As to the issue of any serious question to be tried, the Defendant submitted that contrary to the Plaintiff's repeated references to "his tax allotment", the Ministry of Lands does not in fact have any record of the Plaintiff being registered as the holder of that land or any land at Ma’ufanga adjoining Pili Quarry. On that basis, the Plaintiff lacked standing to seek the injunction or to challenge the boundaries of the Defendant’s land because the Plaintiff has no legal entitlement to the land which he alleges is affected by the actions of the Defendant.
  4. The Defendant submitted that the balance of convenience weighs against the grant of the injunction because:
  5. Further, the Defendant submitted that as the Plaintiff owes a significant judgment debt and costs awards against him, there is a clear risk that his undertaking as to damages is of little or no substance such that the Defendant is unlikely to be compensated if the injunction is granted and subsequently overturned.
  6. Minoru Nishi junior is a director and shareholder of the Defendant company. Relevantly, Mr Nishi deposed that when the Defendant acquired the quarry in 2011, the area in question along the eastern boundary of the two Nishi leases which the Plaintiff has identified as the area of dispute had already been fully excavated up to the boundary line. It was not possible to conduct further quarry operations at the site. Since then, Nishi used the quarry as a site for rock crushing. There is a rock crushing machine at the quarry and truckloads of rock are transported from other Nishi sites to the quarry to be crushed. Mr Nishi confirmed that in 2016 the Plaintiff alleged unlawfully extraction from the Plaintiff's allotment and demanded compensation then in the amount of $104,457.25. At that time, the Plaintiff's then lawyer inspected the quarry site and was shown that there was no excavation at the site and well as rock piled up next to the crushing machine in the area along the boundary which the Plaintiff claims has been quarried. He then heard nothing further from the Plaintiff or his lawyer until September 2018. Then, the Plaintiff's new lawyer wrote to the Defendant demanding that it stop excavation at the site immediately and provide an account of the number of truckloads of rock and topsoil taken from the quarry since April 2017, failing which, an application would be filed to restrain the Defendant from carrying out any further activities at the quarry which would "be a major disruption of your enterprise in which you do not want us to do that".
  7. Mr Nishi confirmed that on 17 October 2019, the Plaintiff’s lawyer again alleged that the Defendant was carrying on "unlawful activity" by extracting rock over and beyond the boundary of the Plaintiff's tax allotment and demanded that the Defendant pay $483,840 plus legal fees, failing which, the matter would be taken to court and a restraining order would be sought to "stop any further activity at Pili until the matter is resolved".
  8. Mr Nishi referred to the two aerial photographs and explained the relevant difference as being the location where the rock transported from Longoteme is dumped and piled up at the quarry, that is, the light colour is a pile of rock, not excavation or removal of rock.
  9. In relation to the Plaintiff's undertaking as to damages, Mr Nishi deposed that he had been informed by his lawyer, Mrs Stephenson, that the Plaintiff owes a significant unpaid judgment debt as well as unpaid costs awards. He confirmed the Defendant’s apprehension that it would be unlikely to recover any compensation in the event that any injunction granted now was subsequently overturned on a final determination of the Plaintiff's claim.
  10. Rosamond Bing, Chief Executive Officer of the Ministry of Lands & Survey in Tonga, deposed from searches conducted of the Ministry's records with respect to the subject land, that there is no record of the Plaintiff being registered as the holder of a tax or town allotment in any part of the land adjoining the quarry, nor is there any record of the Plaintiff having lodged an application for the grant of such allotments or for the grant of any lease of any part of the subject land. Ms Bing also deposed to the accuracy of an exhibited copy of the relevant survey maps held at the Ministry showing the delineation of the eastern boundary of the Nishi leases (being the common boundary with the adjoining land).
  11. Viliami Hia is employed by the Bank of the South Pacific, as the manager of the BSP's Loan Management Unit. He deposed to the Plaintiff having been the sole director and shareholder of a company in 2011 which borrowed $100,000 from (then) Westpac. The loan was secured by a mortgage debenture over the company's assets and a personal guarantee from the Plaintiff. The company defaulted and the bank appointed a receiver who took control of the company and possession of its land and building and proceeded to sell them. The proceeds of sale were insufficient to repay the loan in full. Westpac made a demand on the Plaintiff for payment of the $100,000 pursuant to the guarantee. The Plaintiff did not pay. During the course of the receivership, the Plaintiff commenced an action in the Land Court challenging the validity of the mortgage. That claim was struck out. In April 2014, the Plaintiff commenced a further action in the Land Court against the company, Westpac and the Ministry of lands. In June 2015, that claim was struck out against all Defendants and costs awarded against the Plaintiff, which, in respect of Westpac and the company totalled $4,216. The Plaintiff appealed that decision. On 7 September 2015, the Court of Appeal dismissed the Plaintiff’s appeal for want of prosecution, with costs. In 2014, Westpac commenced proceeding CV 25 of 2014 for recovery of the $100,000 pursuant to the Plaintiff's guarantee. On 7 September 2015, summary judgment was entered in that sum plus interest and costs which were taxed in the amount of $3,645. The Plaintiff has failed to pay the judgment sum or the costs in the proceedings referred to above. On 5 January 2016, Westpac applied, and an order was made, for the appointment of a Receiver to the Plaintiff. The Receiver was unable to locate any assets of value belonging to the Plaintiff which could be sold to satisfy the judgment debt and costs awards. As at the date of Mr Hia’s affidavit, neither the judgment debt nor the costs awards have been paid by the Plaintiff. Extracts from the various court documents and orders evidencing the indebtedness deposed to by Mr Hia were exhibited to his affidavit.
  12. Apitanga Loumoli has been employed by the Defendant since September 2009. He was previously employed by the former owner/operator of the quarry between 1993 and 2000. He confirmed that since working for the Defendant, he had not been instructed to carry out any excavation works at the quarry. He also confirmed that there is an area at the quarry where rock is brought and stored in readiness for crushing but that he had not seen any rock being excavated or removed from the quarry since he has been working there for the Defendant.

Statement of Defence

  1. Consistent with the above affidavits, the Defendant’s Statement of Defence filed 26 November 2019, alleges, relevantly:

29 November 2019

  1. In response to the Defendant’s material summarised above, on 29 November 2019, the Plaintiff filed a further submission and an affidavit of one, Richard Henderson Vea. Relevantly, Mr Vea deposed that on 27 November 2019, on instruction from the Plaintiff, he retrieved from the Plaintiff’s home a copy of an application to lease the allotment in question. A copy of the said application was exhibited. The application was for four of eight acres. It appears to be signed by the estate holder on 5 November 2008 and also the Minister of Lands. Attached to the application is a plan of the area concerned showing two lots, one marked ‘Lot 29’, the other marked ‘Lot 29A’ and ‘A/R’ which I understand to mean ‘area required’. Mr Vea deposed to having lived at the Plaintiff's house for more than five years and that the Plaintiff had “allowed certain people to go and reside on the tax allotment in question."
  2. The Plaintiff’s further submissions may be summarised as follows:

3 December 2019

  1. On 3 December 2019, the Defendant filed a submission which repeated that the Plaintiff lacked standing to apply for the injunction because until any lease in favour of the Plaintiff has been approved by Cabinet and registered (s.126 of the Land Act; Lopeti v Lopeti [2018] TOCA 8), the subject land was still part of the hereditary estate of Lord Fakafanua. Further, the Defendant noted that the application for lease is in respect of Lot 29A whereas it is in fact Lot 29 which has the common border with the quarry.
  2. In relation to the Plaintiff’s claimed possessory right over the subject land, the Defendant again noted that the Plaintiff’s earlier statements that, or to the effect that, he was the holder of the tax allotment, were “fundamentally untrue” and that he must have been aware of the 2008 application for lease when he swore his affidavit initiating this application because he had a copy in his possession.
  3. The Defendant reiterated that as the Plaintiff had neither a beneficial nor a legal interest in the land, but rather a mere licence to occupy the land, he had not standing to bring this application.

5 December 2019

  1. On 5 December 2019, the Plaintiff filed a submission in response to the Defendant’s submission of 3 December 2019. In it, the Plaintiff:

6 December 2019

  1. The matter was heard again on 6 December 2019. Submissions concerned the then fundamental issue on the application, namely, whether the Plaintiff had any interest in the subject land which could properly be the subject of injunctive orders, or in other words, whether the Plaintiff lacked locus standi to seek an injunction.
  2. It was also noted that despite the Plaintiff having made a number of demands on the defendant since 2016 in relation to the alleged encroachment and illegal quarrying of the land the Plaintiff asserts is his, he did not make any application for an injunction until the instant filed on 31 October 2019.
  3. Mr Mo’ale conceded that his client was not the registered holder of the tax allotment but contended that a different interpretation ought be given to the pleaded allegation. At that point, I raised concerns about the requirement on any applicant for equitable relief to ‘come with clean hands’. To that, Mr Mo’ale indicated that the Statement of Claim required further amendment to include joinder of other parties such as the Minister of Lands and the estate holder. My question to Mr Mo’ale as to why no action had been taken by his client since 2008 to have the lease registered, went unanswered. He did say that since that time his client had proceeded on the understanding that he possessed a legal interest in the land because “other people had authorised him to use it”. When asked for the identities and positions of those people, Mr Mo’ale responded "just local people".
  4. At that stage, it was noted that where in a case it is incontrovertible by reference to the relevant register, that an applicant for injunction has no legal or beneficial interest in land the subject of the application, the court may refuse the application for an injunction on the basis that there is no serious question to be tried because the position is so clear, that the application cannot succeed. In the face of that observation, Mr Mo’ale sought an adjournment to adduce further affidavit evidence to address this issue. When asked what that further material was likely to contain which could advance the matter, he said that an affidavit from the estate holder would be to the effect that he gave the plaintiff rights of possession over the land. Mrs Stephenson submitted that even if that were the case, it would not imbue the Plaintiff with any legal entitlement. On the evidence then available, Cabinet had not approved the application for lease. If it had, that might have given rise to a beneficial interest in land. At most, she submitted, the Plaintiff could only be said to have a licence to occupy the land, from which he gained no legal or proprietary rights which could support the application for injunction.
  5. Notwithstanding the force in Mrs Stephenson’s submissions, and the preliminary reservations expressed during exchanges with Mr Mo’ale as recorded above, I acceded to the Plaintiff's request for an adjournment to enable Mr Mo’ale to consider the matter further, and if his client was so minded, to file further material and submissions.

16 December 2019

  1. On 16 December 2019, Mr Mo’ale filed a memorandum advising that the Ministry of Lands had confirmed that his client’s application for a lease over Lot 29 (not 29A) was submitted on 16 October 2008. He submitted (without any evidence) that on 23 November 2016, a direction was given to action the application and that on 9 January 2017, a direction was given to complete the survey. He was informed by the Plaintiff that the Ministry had assured him that Cabinet approval for Lot 29 would “be obtained, most likely, on Monday 16 December 2019 and survey and registration of the lease will follow”.
  2. He further submitted that in case the lease had not been registered in time, the next hearing scheduled for 13 January 2020 be deferred. Otherwise, he stated that if the lease was registered before then, a copy would be served on the Defendant by 10 January 2020.

13 January 2020

  1. In the lead up to the further hearing on 13 January 2020, the Defendant filed a further affidavit of Rosamond Bing and a further submission.
  2. Ms Bing deposed, among other things, that the Ministry of Lands had discovered two applications for leases of land to the Plaintiff near Pili Quarry in respect of Lots 29 and 29A.
  3. Mrs Stephenson submitted that:
  4. During the hearing on 13 January 2020, Mr Mo’ale handed up an application to add the estate holder, Lord Fakafanua, as another Plaintiff to the action. The application was supported by an affidavit of Lord Fakafanua sworn 10 January 2020. Apart from consenting to the joinder, Lord Fakafanua deposed, relevantly, to having given both lots 29 and 29A to his uncle “to take possession, use and do with as he so wishes”.
  5. A number of issues arose from the proposed application for joinder. For instance, it was not then clear whether Lord Fakafanua joined with the existing Plaintiff on the instant application for injunction, or for that matter, whether he also claimed the substantive pecuniary relief in the Statement of Claim. After discussion with Mr Mo’ale about those matters, and others, and given that Mrs Stephenson had only then just been served with the application, it was agreed that the matter needed to be adjourned again.
  6. Mr Mo’ale also advised that a new application for lease had that day been filed by the Plaintiff with the Ministry of Lands in respect of only two acres (half) of Lot 29 directly abutting the east side of the Defendant's land. He was not able to say what was to become of the two 2008 applications for lease, or what bearing the new lease, if registered, might have on the overall proceedings.
  7. Mr Mo’ale maintained that the Plaintiff had standing on the application pursuant to what he described as "equities of possession". To that end, he referred to the decision in Faleafa v Faleafa [2015] Tonga LR 310 at [170]. That case involved issues of equitable estoppel against a claim for eviction.

19 March 2020

  1. On 24 January 2020, Mr Mo’ale filed a memorandum raising the following matters:
  2. On 21 February 2020, the Defendant filed a memorandum addressing each of the above. For present purposes, it is not necessary to rehearse each submission.
  3. During the next hearing on 19 March 2020, Mr Mo’ale did not press the first of the above matters. He informed the court that there had been no further developments in relation to the estate holder's position in the proceeding or the Plaintiff's applications for lease before Cabinet.

Amended Statement of Claim

  1. Mr Mo’ale then handed up a proposed Amended Statement of Claim which he had filed earlier that morning. The document bore little resemblance to the original Statement of Claim save for the monetary claim of compensation in the sum of $483,840 and the method by which that sum is alleged to have been calculated. The more notable amendments included:
  2. Mr Mo’ale then made submissions to the effect that the Plaintiff's claim, including his application for an injunction, no longer had anything to do with legal title to the land in question, but rather was now “all about lawful possession” and personal property in “rocks and stones” and the "stealing of corals". He referred to the decision in Niu and ors v Tapealava and anor [2013] TOCA 2 which concerned an application for injunction restraining the Respondents there from seeking to forcibly evict the Applicant from certain land and a house she had been occupying. The Court of Appeal opined:
“[20] The actions of trespass to land and trespass to goods protect lawful possession, not title as such. Even if the Land Court ultimately decides that the second defendant had a better title than the plaintiffs, that decision, after the event, would not justify or excuse the second defendant's forcible entry onto the property and into the house with her lawyer and 6 male security guards. The defendants would still be liable for those trespasses.
[21] One of the rights enjoyed by a person in lawful possession of land or personal property is the right to be protected from unlawful disturbance of that possession, a right which can be protected by injunction and vindicated in an action for trespass to land or goods. This right and these remedies against self-help, taking the law into one's own hands, are essential for the preservation of the King's peace, and the rule of law in Tonga.
[22] The rights under the law of Tonga of those in lawful possession of an allotment without a documentary title were recognized in Tafa v Viau [2006] Tonga L.R. 125 (LC) and 287 (CA). At [2] the Court of Appeal said:
"At the time of an application made by the appellant for the grant of an allotment...the...respondents...were in lawful occupation of the land."
[23] In that case the respondents' "lawful occupation" without a documentary title enabled them to successfully challenge a grant by the Minister to another, leaving it to the Minister to determine who should receive the new grant.
[24] The right of a lawful occupier to undisturbed possession until the Land Court makes an order requiring him to vacate is another aspect of the right conferred by lawful possession of the property and the house.
[25] Since the dispute before the Lord Chief Justice did not concern titles to land, section 151(2)(b) of the Land Act, which gives the Land Court power to issue injunctions, cannot deprive the Supreme Court of jurisdiction either. This power will be exclusive if the dispute concerns "titles to land" but is not expressed to be exclusive in other land cases, such as the present, where title was not in issue.”
  1. On that basis, Mr Mo’ale contended that the Plaintiff had standing to bring the injunction application.
  2. When asked for an explanation for his failure to comply with previous directions for any Amended Statement of Claim and further submissions to advance the Plaintiff’s new claim, Mr Mo’ale said, in terms, that it had taken him “a long time” to get on top of all the facts in the case.
  3. Mrs Stephenson had no notice of either the proposed Amended Statement of Claim or the further submissions sought to be advanced by Mr Mo’ale that day. The matter therefore had to be further adjourned yet again. Directions were made for further material to be filed and the Plaintiff was ordered to pay the Defendant’s costs of and incidental to the appearance that day on an indemnity basis.

27 March 2020

  1. On 27 March 2020, Mr Mo’ale filed his final submission on the application. He annexed the submission filed by Mr Pouono on 29 November 2019 (referred to above) and asked that it be considered again.
  2. In his memorandum, Mr Mo’ale also sought leave to amend the terms of the injunction to “stop the Defendant from collecting coral rock on Lot 29”. With that, he submitted that on the balance of convenience, an injunction would not stop the Defendant’s operation at the quarry.
  3. Mr Mo’ale did not request a further oral hearing.

7 April 2020

  1. Mrs Stephenson’s final submissions on the application were filed on 7 April 2020. She submitted, relevantly:
  2. Mrs Stephenson also did not require a further oral hearing.

Legal principles

  1. Section 149(1)(b) of the Land Act confers jurisdiction on the Court to, relevantly, hear and determine all disputes, claims and questions of title affecting any land or any interest in land in the Kingdom. Section 151(2)(b) empowers the Court, whenever necessary, to grant and issue injunctions affecting lands.
  2. The object of the grant of an interlocutory injunction by maintaining the status quo is to protect the plaintiff against injury for which he or she could not be adequately compensated in damages if the alleged infringement of his or her rights by the defendant were to continue pending the resolution of the proceeding or determination of the rights of the parties at the hearing of the suit.[1]
  3. “In order to secure an injunction a plaintiff must show that there is a serious question to be tried (in the sense that the plaintiff has made out a prima facie case) and that the balance of convenience favours the granting of the injunction. This enquiry requires the Court to look at the impact on the parties of a granting or the refusal of an order. Finally, an assessment of the overall justice of the case is required. If it can be shown that a plaintiff will be adequately compensated in damages and will suffer no irreparable injury if the injunction is not granted that is an important factor against the making of an order. However, the grant of an interim injunction involves the exercise of a discretion and the approach ... outlined cannot be taken as suggesting a rigid or mechanical approach”: per Paulsen LCJ’s adoption of the approach in Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 140 (CA),[2] affirmed by the Court of Appeal in Friendly Islands Satellite Communications Ltd v Pohiva [2015] TOCA 14. See also Australian and New Zealand Banking Group Ltd v Latu [2018] TOLC 3.
  4. To those principles may be added that the Court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been “wrong”, in the sense of granting an injunction to a party who fails to establish his right at the trial, or in failing to grant an injunction to a party who succeeds at trial: Bradto Pty Ltd v State of Victoria; Tymbook Pty Ltd v State of Victoria [2006] VSCA 89.
  5. A need for protection of this kind most commonly arises where property as to which there is a dispute may be damaged, destroyed or removed or where the value of other rights of the plaintiff may be diminished. In such cases, the basis that underlies the grant of relief is that the risk of detriment or inconvenience to the applicant is so great that, notwithstanding any hardship to the defendant or other persons the issue of an interlocutory injunction may cause, it is nonetheless just that the court should act to preserve the subject matter that is in dispute or otherwise to protect the plaintiff's position.[3]
  6. Other principles will be considered below as they arise in the analysis.

Consideration

Serious question to be tried?

  1. In order to show that there is a serious question to be tried, the Plaintiff must establish a prima facie case, meaning a sufficient prospect of success at the trial of the action to warrant the preservation of the status quo in all the circumstances.
  2. With the introduction of the Amended Statement of Claim, and accompanying explanatory new legal basis submitted for the Plaintiff’s claim, the Defendant tacitly accepted that the Plaintiff had standing to apply for the injunction.
  3. However, that is not the end of the matter, for both prior to and since the Plaintiff’s change of pleaded tack on his claim, a number of questions present, some of which tend to demonstrate that there are serious questions to be tried while others cast doubt on whether the Plaintiff has established, on this application, even a prima facie case for relief.
  4. The core of the Plaintiff’s amended claim is that the Defendant has encroached onto Lot 29 and, on the one hand, extracted rocks from the lot, while on the other, it has piled uncrushed rocks on the lot. In that regard, the only relevant evidence adduced is:
  5. There is no evidence as to who or how or when the fence was damaged. The Plaintiff presumably relies on an inference that the Defendant was responsible for the damage.
  6. Similarly, there is no evidence any person witnessing the Defendant or any of its personnel actually encroaching on the Plaintiff's land to taking rock from it.
  7. The Defendant’s criticisms of the surveying evidence adduced by the Plaintiff are understandable. At trial, those criticisms may well hold greater sway. But for the purposes of an interlocutory application, the usual strictures of form, admissibility and proof are necessarily less stringent.
  8. The comparative aerial photographs show, assuming the boundaries are correct, that at the southern end of the Plaintiff's allotment (Lot 29) and continuing over that boundary into the allotment south of the Plaintiff's allotment (which appears to be Lot 32 on the pan exhibited to Ms Bing’s affidavit) an area of land described in colour terms as white or greyish, but which in 2012, was covered in natural vegetation. It is unclear from the photograph whether the change in colour represents either extraction of rock from that area of land or stockpiling of rock. The photograph, in plan, does not reveal any actual changes in topography in that area. However, what is observable is that the Western part of the cleared area is just East of the eastern boundary of the Defendant's property. The cleared area does not extend from the Plaintiff's allotment to the West into the Defendant's property. From that, it is not clear whether there has been any encroachment by the Defendant into the property to the South of Lot 29. What however does appear clear is that the eastern side of the cleared area within the Plaintiff's Lots 29 continues to the East to what appears to be a tract or clearing for vehicles. In other words, that track goes out to the East; it does not appear to come from or into the Defendant’s side which one would expect if the Defendant was encroaching from his allotment into the Plaintiff’s.
  9. In any event, the compensation claimed by the Plaintiff, despite recent amendment to its characterisation, has remained consistent at $483,840, which has always been the pleaded value of the rocks allegedly removed from the Plaintiff’s land. Apart from the added claim for exemplary damages in the sum of $5,000 (without any pleaded basis), the corpus of the Plaintiff’s claim is for the value of rocks he says have been taken by the Defendant from his land. No other claim is articulated for any alleged loss and damage resulting from the damage to the fence or the further or alternative alleged trespass for the purpose of piling rocks on the Plaintiff’s land ready for crushing.
  10. That clarification of the Plaintiff’s real pecuniary claim gives rise to another question: whether the Plaintiff’s possessory interest in the land by way of licence from the estate holder pending any lease being registered, confers on the Plaintiff a personal legal interest or ownership in any rocks extracted from the land? The corollary is: who is the ‘true owner’ of the any rocks alleged to have been extracted – the Plaintiff or the estate holder?[4] Those questions may be compounded by comparing the evidence of Lord Fakafanua on the one hand that he gave the land to the Plaintiff to do with as he likes, yet on the other, that he agreed to the Plaintiff leasing the land. In the latter scenario, one is compelled to ask whether in the absence of any special terms of the proposed lease, a lessee would be entitled to quarry, extract and sell rocks from the leasehold land.[5] The Noble’s evidence did not descend to that level of particularity.
  11. All in all, the Plaintiff’s material and approach to this application has produced real reservations about the nature and strength of his claim. However, on an application such as this, the court is neither required nor able to determine, once and for all, these or any other issues arising on the claim thus far. As Lord Diplock said in American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396 at 406-407:
“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."
  1. The questions posed above together with the less contentious evidence as to the proximity between the parties’ allotments, visible change of condition of part of the Defendant’s land close to what appears to be the boundary and the nature of the Defendant’s operations at the quarry are enough to satisfy me that there are serious questions to be tried. To those may be added Mrs Stephenson’s primary final submission that there is uncertainty as to the correct location of the relevant boundary.

Balance of convenience

  1. The balance of convenience may be better expressed as the balance of the risk of doing an injustice.[6] The court must determine whether the inconvenience or injury which the Plaintiff would likely suffer if an injunction were refused outweighs or is outweighed by the injury the Defendant would suffer if the injunction were granted.[7]
  2. Had the Plaintiff persisted with the form of orders he originally sought, effectively seeking to shut down the Defendant’s entire operation at the quarry, the balance of convenience would clearly have been against the grant.
  3. However, the amendment to the form of the order sought, simply restraining the Defendant from collecting coral rock on Lot 29, in circumstances where the Defendant denies ever having done so, means that an order in those terms should have little, if any, impact on the Defendant or its operations. Conversely, if the Plaintiff is ultimately able to prove that the Defendant has extracted and removed rocks from the Plaintiff’s land, then if presently unrestrained, the Plaintiff could continue to suffer harm.
  4. Accordingly, I am satisfied that on the Plaintiff’s amended case, the balance of convenience in terms of comparative effects on each party if the order is made or not, weighs in favour of the grant of an injunction.

Damages an adequate remedy?

  1. However, the reference above to whether the Plaintiff might continue to suffer ‘harm’ if an injunction is not granted raises a question, usually considered as part of the balance of convenience, as to whether damages would be an adequate remedy meaning whether he will suffer irreparable injury for which damages will not be adequate compensation unless an injunction is granted.
  2. The only substantive relief ever demanded or pleaded by the Plaintiff is ‘compensation’ in the form of the monetary value of rocks the Plaintiff alleges have been extracted and removed by the Defendant. No plea is made for any permanent injunction or other non-pecuniary relief consistent with the Plaintiff seeking protection from conduct which might otherwise cause irreparable harm.
  3. That a plaintiff has shown himself prepared to accept a sum of money in satisfaction of the injury in question bears on two questions. Firstly, whether the injury to the plaintiff is in truth irreparable in the material sense. Secondly, on more general questions of hardship and inconvenience as between the parties. The preferable view is that these considerations are merely taken into account for evidentiary purposes in relation to the balance of hardship or of convenience and that they are not ordinarily of significant weight: e.g. see Senior v Pawson [1866] UKLawRpEq 232; (1866) L.R. 3 Eq. 330.
  4. Here, in my view, the Plaintiff’s pleaded case, both initial and amended, tend to demonstrate that damages would be an adequate remedy and therefore militates against the injunction.

Other discretionary factors

Clean hands?

  1. The Plaintiff’s original material on this application asserted, either expressly or impliedly, that he was the registered holder of the tax allotment/s in question. He did not refer to any application for lease nor that such lease had not been registered as at the date he commenced these proceedings. That initial pleading and evidence was, at best, misleading to both the Defendant and the Court. In that sense, the Plaintiff did not initially come to this court with ‘clean hands’.
  2. The question then becomes whether that conduct ought disentitle the Plaintiff from the relief now sought.
  3. An injunction will ordinarily be refused when an applicant culpably misleads the court or it is sought in furtherance of a deception that is being practised on either the defendant or particular third persons or members of the public, so that the assistance of a court of equity is inappropriate: Darling v Gascard (1901) 3 W.A.R. 90; Armstrong v Sheppard & Short Ltd [1959] 2 Q.B. 384. A refusal of relief can ordinarily at least be based upon fraud or misrepresentation or absence of underlying rights, but it has sometimes been ascribed to an absence of ‘clean hands’: Kettles and Gas Appliances Ltd v Anthony Hordern and Sons Ltd [1934] NSWStRp 51; (1934) 35 S.R. (NSW) 108.
  4. The necessity for making proper enquiries was affirmed in Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350. A matter is regarded as material for these purposes either if it is relevant to the existence of a power to grant an injunction or if it is one of those circumstances that the court takes into account in exercising its discretion. It does not have to be shown that the undisclosed matter in question would, if established, have been decisive, for one reason or another, against the party who has not made a proper disclosure. It is sufficient that it is relevant and of such a nature that it might have been regarded by the court as of weight; and so, for example, it has been said to be appropriate to enquire whether there has been "any misstatement or omission of any important facts": Beese v Woodhouse [1970] 1 WLR 586; Thomas A. Edison Ltd v Bullock [1912] HCA 72; (1912) 15 CLR 679. This consideration may be relevant to the exercise of the court's discretion: Memory Corporation Plc v Sidhu [2000] EWCA Civ 9; [2000] 1 WLR 1443. In appropriate circumstances, an injunction may be granted or continue despite a material nondisclosure, and in such cases the court may, in its discretion, hold that the plaintiff should be penalised by an appropriate order as to costs: Thomas A. Edison Ltd v Bullock, ibid.
  5. Despite the inordinate number of hearings, affidavits and submissions filed on this application, the Plaintiff has never explained, adequately or at all, the reason for his initial misdescriptions of his ‘interest’ in the subject land. But for his subsequent affidavits and submissions which sought to correct the record so to speak, I would have been inclined to add this factor to those weighing against the grant of the injunction. However, as the matter has since been elucidated, perhaps more as a result of the Defendant’s investigative material than the Plaintiff’s candour, I have decided to treat this issue as closer to neutral in value on the overall assessment of the application.

Delay

  1. The essence of an application for interlocutory injunction is that “it should be made with promptness": Sherwell v Combined Incandescent Mantles Syndicate Ltd [1907] W.N. 211 at p 212. A plaintiff must be able to establish a risk of imminent irreparable injury such that in the circumstances the court should intercede at once on his behalf. Delay by a Plaintiff, or a ‘want of vigilance in pressing his remedy’, even of a relatively short time, is generally held to be unreasonable and can be fatal to the application: Société Francaise v Electronic Concepts Ltd [1976] 1 WLR 51; White v Taylor [1874] SALawRp 1; (1874) 8 SALR 1 at p 35. However, a hallmark of the actual practice of courts of Equity is that they are neither rigid nor inflexible.
  2. A defendant who wishes to establish laches must show both that the plaintiff has delayed unreasonably and also that by reason of the delay, the defendant has suffered some prejudice, so that it becomes "practically unjust" to grant the particular injunction in question, either absolutely or conditionally or in a limited form: Magna Alloys and Research Pty Ltd v Ten-Haaf [1978] TASStRp 13; [1978] Tas. S.R. 136 at 170. In cases of longer delay, prejudice to the defendant is more readily inferred.
  3. Further, an applicant’s delay may tend to throw considerable doubt upon the reality of his alleged injury and indicate that the material injury causes him less hardship or inconvenience than might otherwise have been supposed, so that his claims for injunctive relief should be given correspondingly less weight: Chinn v Thomas [1879] VicLawRp 150; (1879) 5 VLR (E.) 188.
  4. In the present case, the Plaintiff’s counsel impermissibly sought to give evidence by submission that, in 2013, the Plaintiff sold rocks from Lot 29 to the Defendant for $16,000. If true, that was another, until then, undisclosed fact relevant to a proper understanding of the background to this application. The Plaintiff himself deposed to a ‘misunderstanding’ in August 2016, whereby he alleged that the Defendant ‘had trespassed and converted uncrushed rocks form the quarry’. In September 2018, he says the boundary fence had been damaged and there were signs of excavation. His response then was to demand compensation. Again, in October 2019, by a new lawyer, the Plaintiff demanded compensation, and threatened this application.
  5. The Plaintiff’s delay of approximately three years before filing this application casts real doubt on the seriousness of any actual or threatened harm now complained of by the Plaintiff. Together with the observations above on damages being an adequate remedy, the delay here weighs heavily against the grant of an injunction.
  6. However, in light of the amended form of the order sought, there is no evidence (or submission) that the delay has caused prejudice to the Defendant or its operation such that it would be practically unjust to grant the injunction.

Undertaking as to damages

  1. The Defendant has raised concerns as to the worth of the Plaintiff’s undertaking as to damages. The evidence adduced by and on behalf of the Defendant supports those concerns. The Plaintiff’s objections as to the source of the information about his unpaid judgment debt to Westpac of $100,000 (with, presumably, interest accruing) and various outstanding costs orders from previous proceedings are without merit. The published decision by Paulsen LCJ on the substantive debt, and the other orders, are matters of public record.
  2. More importantly, the Plaintiff has not sought to either:
  3. By giving the usual undertaking as to damages, an applicant agrees ‘to abide by any order the Court may make as to damages in case the Court shall thereafter be of opinion that the defendant shall have sustained any, by reason of the order, which the plaintiff ought to pay’. The origin of the requirement for the undertaking lies in the necessity for a party seeking an equitable remedy to ‘do equity’ and as a response to the anxiety entertained by the court that otherwise its interlocutory order might lead to damage for which there could be no redress except by an order for costs. The undertaking as to damages is given to the court, for enforcement by the court; it is not a contract between parties or some other cause of action upon which one party can sue the other. It is obvious that such an undertaking is not to be given lightly: European Banking Ltd v Evans [2010] HCA 6; (2010) 240 CLR 432 at 439.
  4. A claimant seeking an injunction has an obligation to provide the court with sufficient information to enable the court to assess the worth of its undertaking as to damages: Jireh Holdings Ltd v Porchester Ltd HC Auckland M1466/02, 18 December 2002, Paterson J. The worth of the undertaking will be taken into account in assessing the overall justice of the case.
  5. On the available evidence here, the court is left with no alternative than to agree with the Defendant’s well-founded doubts as to the adequacy of the Plaintiff’s undertaking as to damages. Whilst not of itself determinative, such a finding may be taken into account by the court in deciding whether the most just course is that an injunction should be granted: Belize Alliance of Conservation v Department of the Environment [2003] UKPC 63; [2003] 1 W.L.R. 2839.
  6. In such cases, it is open to the court to require that security be provided either by the Applicant[8] or another[9] with sufficient assets before an injunction will be granted. In the face of the Defendant’s expressed concerns, the Plaintiff did not see fit to place any evidence before the Court which might inform whether that course ought be considered.
  7. In weighing the effect of this factor, I also take into account the following countervailing considerations:

Overall justice

  1. As Cooke J (as he then was) said in Klissers Farmhouse Bakeries Limited v Harvest Bakeries Limited [1985] 2 NZLR 140 CA, at 142:
"Marshalling considerations under [the two broad questions of serious question to be tried and balance of convenience] is an aid to determining, as regards the grant or refusal of an interim injunction, where 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 or clearly one way - as the Chief Justice did here - it will usually be right to be guided accordingly. But if the other rival considerations are still fairly evenly poised, 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."
  1. Had the Plaintiff not amended its pleaded case and form of order sought on this application, I have little doubt the overall justice of the application would have resulted in it being dismissed.
  2. However, I have found that, on the reformulated case and form of injunction sought, there are serious questions to be tried and that the balance of convenience favours the grant. While other considerations such as damages being an adequate remedy, the Plaintiff’s initial ‘unclean hands’, significant delay and unsubstantiated undertaking as to damages range from close to neutral value through to militating against the grant, I consider the overall justice lies in granting the application.
  3. Harking back to the observations above in relation to the Plaintiff’s undertaking as to damages, for the reasons stated there and my reservations about the strength of the Plaintiff’s claim as advanced thus far, I consider that some protection ought be afforded to the Defendant in respect of any possible loss and damage it might suffer if the injunction turns out to be incorrect. That can be best achieved by requiring the Plaintiff to provide security for his undertaking as to damages as a condition to the grant. Having regard to the quantum of the Plaintiff’s claim of almost half a million pa’anga, and the apparent size and nature of the Defendant’s operation at the quarry, I consider an appropriate amount for security to be $5,000. A time for payment of the security will be set, failing which, the Defendant will have leave to apply to set aside the injunction: Water Guard NZ Ltd v Cynortic Water Systems Ltd [2014] NZHC 3389. As I have not heard submissions on the issue of security, I will reserve liberty to the Plaintiff to apply for any variation should he wish to do so.

Conclusion

  1. For the reasons stated above, the application for interlocutory injunction will be granted in the following terms:

Upon the Plaintiff:


(i) undertaking to abide by any order the Court may make as to damages in case the Court shall hereafter be of opinion that the Defendant shall have sustained any, by reason of this order, which the Plaintiff ought to pay; and
(ii) providing security for his said undertaking by payment into court of the sum of $5,000 by not later than 15 May 2020,

The Court orders that:


  1. Until the final hearing and determination of the claim in this proceeding, or further order, the Defendant by itself, its employees, servants or agents, or howsoever otherwise, be restrained from encroaching onto the tax allotment occupied by the Defendant known as Lot 29, being part of the estate of Lord Fakafanua at Ma’ufanga, Tongatapu or from taking or converting any coral rocks thereon.
  2. For the purposes of order 1 above, the boundary between the Defendant’s leasehold and Lot 29 shall be informed by Appendix II to the Plaintiff’s affidavit sworn herein on 30 October 2019 but subject to the plan at page 21 of Annexure A to the affidavit of Rosamond Bing sworn herein on 22 November 2019.
  3. In the event of any or any further dispute between the parties, during the course of this proceeding, as to the correct location of the said boundary, the Plaintiff shall request the Minister of Lands to direct a survey of the boundary pursuant to s.24 of the Land Act, and any costs of such survey shall be borne by the Plaintiff in the first instance and otherwise will form part of the costs in the cause (or of the proceeding).
  4. Liberty is reserved to the Plaintiff to apply, prior to 15 May 2020, to vary the amount and/or date for payment of the security upon no less than 48 hours written notice to the Defendant.
  5. Liberty is reserved to the Defendant to apply to vary or set aside the injunction upon no less than 48 hours written notice to the Plaintiff.
  6. The costs of the application are costs in the cause.
  7. A separate form of order will be issued with this Ruling together with further directions for the conduct of the proceeding.


NUKU’ALOFA
M.H. Whitten QC LCJ
5 May 2020
PRESIDENT

[1] Equitable Remedies by Spry, 7th edition, 2007, Thomson Lawbook Co; Heavener v Loomes [1924] HCA 10; (1924) 34 CLR 306 at 325 to 326.

[2] More recently applied in Commerce Commission v Unknown Defendant(s) [2019] NZHC 2609.

[3] Spry, supra.

[4] cf Vaitulala v Cook [2010] TOSC 5 at [31] citing Lord Denning in R H Willis and Son v British Car Auctions [1978] 2 All ER 392, 395.

[5] Compare Uhi v Kingdom of Tonga [2019] TOCA 3.

[6] May LJ in Cayne v Global Natural Resources Plc [1984] 1 All ER 225, 237.

[7] Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57 at [65].

[8] For example, see Pop-A-Shot Inc v Filtration and Pumping (Commercial) Ltd [1989] NZHC 15; (1989) 14 IPR 451; (1989) 3 TCLR 225.

[9] CVJ Endeavour International Ltd v Hall-Smith (High Court, Auckland CP 411/96, 30 October 1996, Paterson J).

[10] Newman Brothers Ltd v Allum [1935] NZLR 17.

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