Chan Wing (Vanuatu) Ltd v Motis Pacific Lawyers [1998] VUCA 7; Civil Appeal Case 05 of 1998 (26 June 1998)

IN THE COURT OF APPEAL OF
THE REPUBLIC OF VANUATU

Civil Jurisdiction

Civil Appeal Case No.05 of 1998

BETW>BETWEEN:

CHAN WING (VANUATU) LIMITED
LAURIE CHAN
KAREN (A.K.A. LO PUI SIN) and
LE FLAMINGO LIMITED
Appellants/Defendants

s

AND:

MOTIS PACIFIC LAWYERS
(A Firm)
Respondent/Plaintiff

CORAM: HON. JUSTICE JOHN von DOUSSA
 p; &nnsp;&&nsp; &nbp; &nbbp;&nnbp;& HONTICE DANIEL FIEL FATIAKITIAKI
;&nspp;&nsbsp;;&nbssp;&nnbs&nnbsp;;&nbssp;HON. JUSTICE REGGETT MARUM

COUNSCOUNSEL: /big>MS SUMS SUSAN BSAN BOTHMANN BARLOW for the Appellants
&nbssp;&nnbsp; &nbsp &nbsp &nbsp  p; &nnsp;&&nsp; &nbp; MR YUDLE fARUthe Respo

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JUDG>JUDGMENT

This is an appeal against an injunction granted by the AcChief Juston. Justice VinceVincent Lunt Lunabek on the 27th of May 1998 restraistraining the Appellants "from commencing or causing to be commenced and from continuing or prosecuting or causing to be continued or prosecuted proceedings (including proceeding for enforcement of any judgment obtained in default of appearance or defence) against the (Respondent firm) or Julian Ronald Moti or Dudley Aru or any partner of the law firm in the Supreme Court of Queensland, the Supreme Court of New South Wales and any other Court in the Commonwealth of Australia or elsewhere out of the Jurisdiction of the Court in respect of any claim relating to certain professional services rendered to any or all (the Appellants) in connection with (various enumerated matters)." Leave to appeal was granted by the Acting Chief Justice on the 4th of June 1998.

It is common ground that the Appellants were desirous of acquiring all the shares in a Vanuatu registered company Le Flamingo Limited ("LFL") which operated a night club and entertainment complex in Port Vila. To this end, the Appellants retained the Respondent firm of solicitors to act for them in Port Vila. The first Appellant company was the vehicle through which the LFL shares were to be acquired by the second and third Appellants.

It is unnecessary and perhaps undesirable for present purposes to detail any further the matters that went wrong between the parties. Suffice it to say that in March 1997 the Appellants were obliged to institute proceedings against the Vendor, Samuel Guiffre, to acquire possession of the night club premises. Two months later in early 1997 the respondent issued a Writ together with an ex-parte summons for a Mareva injunction out of the Supreme Court of Vanuatu. The Mareva injunction was granted by the Acting Chief Justice. In its Writ the Respondent claimed the sum of VT4.858.250 for professional charges for services rendered to the Appellants as their solicitors together with disbursements incurred. The Respondent also sought interest and costs ("the Vanuatu proceedings").

On the 26th of May 1997 the Appellants issued a motion in the Vanuatu Supreme Court seeking to set aside the Mareva injunction and to strike out the second and third Appellants from the Vanuatu proceedings.

Two months later on the 15th July 1997 the Appellants issued a Writ out of the Supreme Court of Queensland against Julian Ronald Moti, a principal of the Respondent firm of solicitors claiming damages for breach of contract, and/or negligence; damages for deceit and/or fraud; and damages for detinue and/or conversion. The relevant Statement of Claim is not before the Court. In the absence of any appearance by Julian Ronald Moti, Interlocutory Judgment was entered for damages to be assessed. These were subsequently assessed at in excess of $A190,000. Thereafter enforcement proceedings were commenced in New South Wales ("the Queensland proceedings").

On becoming aware of the enforcement proceedings, Julian Ronald Moti issued in the Queensland proceedings a motion to set aside the Default Judgment and to stay the proceedings. On 27th March 1998 the Default Judgment was set aside, but the stay was refused. We note that there has been no appeal lodged against the order refusing a stay and that Ronald Moti entered an appearance on 2nd April 1998.

Subsequently on 20th May 1998 the Respondent filed in the Vanuatu proceedings an inter partes motion seeking amongst other Orders an injunction restraining the Appellants from continuing with the Queensland proceedings. This was heard and granted by the Acting Chief Justice on 27th May 1998. So much then for the background to the present appeal.

Counsel for the Appellants in her submissions accepts the jurisdiction of the Acting Chief Justice to entertain the application for the injunction and further, that "(he) correctly identified the proper tests for considering whether to grant an injunction". In both instances we agree. However, counsel takes issue with the application of the tests to the facts of the case.

In this appeal we are undoubtedly concerned with a discretionary decision of the Acting Chief Justice to whom the application was made in the first instance. In such circumstances, it is trite that the grounds on which an appellate court is entitled to interfere are necessarily limited. It cannot interfere simply because its members consider that they would, if themselves sitting at first instance, have reached a different conclusion. It can only interfere where it is clearly satisfied that the Judge at first instance has misdirected himself with regard to the principles in accordance with which his discretion had to be exercised, or where, in exercising his discretion, the Judge took into account irrelevant matters which he ought not to have done or failed to take into account relevant matters; or where his decision is plainly wrong.

In his oral reasons granting the injunction the Acting Chief Justice states: "...the intended Plaintiff was put in an unconscionable and unjust position and at great expense" (see affidavit of Julian Ronald Moti filed on 22nd May 1998 in support thereof and a little later in his reasons his Lordship says: "I find that there is a case of injustice against the intended Plaintiff...and that Vanuatu is also the national (sic) forum" (see: Societe National Industrielle Aerospatiale v Kee Kui Jack & Others [1987] UKPC 12; (1987) 1 AC 871 (PC).

At the hearing of the appeal it was suggested by both counsel that this appeal raises questions of public importance and new law. Whilst it might be that this is the first occasion when an issue such as that raised by this appeal has come before the Courts of Vanuatu, we cannot agree that the case raises any novel propositions of law. Indeed we are inclined to the view that it does not.

We are fortified by the observations of Lord Goff when his Lordship said, in delivering the opinion of the Privy Council, in SNI Aerospatiale v Lee Kui Jack [1987] UKPC 12; (1987) 3 All ER 510 at 519:

"The law relating to injunctions restraining a party from commencing or pursuing legal proceedings in a foreign jurisdiction has a long history, stretching back at least as far as the early nineteenth century. From an early stage, certain basic principles emerged which are now beyond dispute...First, the jurisdiction is to be exercised when the ‘ends of justice’ require it...Second, where the court decides to grant an injunction restraining proceedings in a foreign court, its order is directed not against the foreign court but against the parties so proceedings or threatening to proceed...Third, it follows that an injunction will only be issued restraining a party who is amenable to the jurisdiction of the court against whom an injunction will be an effective remedy...Fourth, it has been emphasised on many occasions that, since such an order indirectly affects the foreign court, the jurisdiction is one which must be exercised with caution...All of this is, their Lordships think, uncontroversial".

We are of course not unmindful of the Judgment of Chesterman J of the Queensland Supreme Court refusing an application to stay the Queensland proceedings in that Court, and we are especially conscious of questions of comity that arise in this case. However, we are satisfied that there is a distinction in principle between a "forum non conveniens" application and a "lis alibi pendens".

As Lord Goff observed in the Aerospatiale case at 522:

"Their Lordships...can find no trace of any suggestion that the principles applicable in cases of stay of proceedings and in cases of injunction are the same. On the contrary..."

and later on the same page at paragraphs (g) and (h) his Lordship set out the principles applicable to the present case which, with appropriate amendment, reads:

"...in a case such as the present where a remedy for a particular wrong is available both in the (Vanuatu) Court and in a foreign court, the (Vanuatu) Court will, generally speaking, only restrain the (Defendant) from pursuing proceedings in the foreign court if such pursuit would be vexatious or oppressive. This presupposes that, as a general rule, the (Vanuatu) Court must conclude that it provides the natural forum for the trial of the action, and further...that account must be taken not only of injustice to the (Plaintiff) the (Defendant) is allowed to pursue the foreign proceedings, but also of injustice to the (Defendant) if he is not allowed to do so. So, as a general rule, the court will not grant an injunction if, by doing so, it will deprive the (Defendant) of advantages in the foreign forum of which it would be unjust to deprive him."

In this case we are satisfied from the following factors that the Supreme Court of Vanuatu is the "natural forum" for the trial of both the Queensland and the Vanuatu proceedings:

1. The Respondent firm is primarily based in Vanuatu and both Appellant companies are incorporated under the Law of Vanuatu and have their registered offices in Vanuatu;

2. The relevant sale and purchase contract and retainer were entered into in Vanuatu and are expressly governed by the laws of Vanuatu; and

3. The subject matter of the sale and purchase agreement is a night club operating out of premises situated in Port Vila, Vanuatu.

In our view, the Acting Chief Justice was plainly correct when he said that "...the transactions upon which the action was filed in this jurisdiction were the same transactions out of which (the Appellant) filed an action in the Queensland jurisdiction."

Furthermore, we consider the following elements makes this case "exceptional":

1. The fact that the partners of the Respondent firm of solicitors are duly admitted legal practitioners of the Supreme Court of Vanuatu and are therefore subject to the disciplinary jurisdiction of the Court;

2. The fact that the taxing of the Respondent’s claim for professional charges is exclusively a matter for the Vanuatu taxing authorities: (see Hudson & Co. v Greater Pacific Computers Ltd (Civil Appeal No. 07 of 1997). The complaints raised by the Appellants about the quality of the services rendered by the Respondent are likely to arise on the taxation of costs, and the Respondent, in any event, is entitled to set off these costs against any claim by the Appellants. Besides arising out of the same factual situation, the claims of the Appellants and the Respondent respectively are interrelated in this way; and

3. The desirability in the public interest of Vanuatu that a case which undoubtedly raises questions concerning the professional standards, competence and conduct of an officer of the Supreme Court of Vanuatu and a legal practitioner in Vanuatu, ought to be heard in the Courts of Vanuatu.

In the absence of an affidavit from the Appellants as to any "advantages" that they would be unjustly deprived of by restraining them from proceeding in the Queensland proceedings learned counsel for the Appellants sought to rely on the lengthy delay in obtaining a fixture for the hearing of the application to discharge the Mareva injunction granted against the Appellants.

We accept that there has been delay in the disposal of the Appellants’ motion and of this, the Acting Chief Justice was undoubtedly conscious in his Judgment. We are also mindful that the Queensland proceedings may have somewhat overtaken the urgency of the Appellants’ motion, but in any event, having regard to the undertakings given by the Respondent, which include the satisfactory disposal of the Appellants’ motion (see Condition 5), we need say no more on that.

It is also argued for the Appellants that the prime witness to the sale/purchase transaction, the Vendor Mr. Guiffre, cannot be compelled to give evidence in Vanuatu and any damages claimed by the Appellants may not be recoverable without his evidence. The nature or substance of that evidence is unknown to this Court but in any event, having regard to the "particulars" alleged against the Respondent in the Appellants’ Statement of Claim in the Queensland proceedings and the fact of the proceedings undertaken by the Appellants against Mr. Guiffre in the Supreme Court of Vanuatu in March 1997, we remain doubtful that the absence of his evidence represents either the deprivation of a material advantage to the Appellants in the Queensland proceedings or gives rise to any injustice to them.

In light of the numerous "reasons" and "factors" advanced in the Respondent’s affidavit in support of the injunction, many of which were not canvassed before Chesterman J of the Supreme Court of Queensland, and mindful that his Honour may not have been aware that the Vanuatu proceedings were already in existence at the time the Queensland proceedings were commenced, we are satisfied that the Acting Chief Justice exercised his discretion in an entirely proper manner.

At the conclusion of the hearing of the appeal, the Court considered that the case was an exceptional one, and that the Appellants had not demonstrated error in the discretionary Judgment of the Acting Chief Justice. The Court, however, considered that it would be desirable to add certain conditions to the grant of the injunction to ensure that the disposition of the proceedings in Vanuatu was expeditious and efficient. The Court therefore informed the parties that it was minded to dismiss the appeal, but subject to the Respondent undertaking to comply with certain conditions. The Court indicated those conditions to the parties and adjourned the matter to enable them to consider their respective positions.

When the Court reconvened on 24 June 1998 the parties had agreed the conditions. Mr Julian Ronald Moti on behalf of the Respondent undertook that the Respondent would comply with the following conditions:

1. that within a period of no more than three weeks from the date hereof all bills of account from the Respondent to the Appellants for costs claimed in this action shall be rendered in taxable form and delivered to the Appellants’ solicitor. The account relating to an alleged agreement for a fixed sum shall include evidence of the agreement so alleged and shall also be set out in itemised form.

2. the document referred to in Justice Chesterman’s Judgment on page 6 and described as "detailed accounts showing the receipt and application of funds" which according to the Respondent’s affidavit filed in the Queensland proceedings have been prepared shall be filed by the Respondent within two weeks hereof.

3. that the Respondent herein undertakes that in the event that Judgment is obtained against it by the Appellants in the Vanuatu proceedings the Respondent will not seek to challenge the registration of the Judgment in Australia or the proper implementation of enforcement actions by the Appellants in Australia against property of the Respondent or any partner thereof.

4. that these conditions are subject to the Appellants being at liberty to take such proceedings as may be necessary to enforce the costs order in the Queensland proceedings against the Respondent in Australia.

5. that subject to the Appellants providing full security for the legal costs claimed by the Respondent by way of payment of the sum of VT4.858.250 into Court or into a proper fund approved for the purpose by the Court, the Respondent shall immediately thereafter provide to the Appellants’ solicitor all or any files, papers, documents and materials held by it on behalf of the Appellants in any matter whatsoever and upon such security being paid the ex parte order dated 6th May 1997 herein shall immediately be discharged.

6. subject to Condition 4 above, that if any of the conditions set out herein are not complied with by the Respondent the Appellants shall have liberty to apply to the Supreme Court on 24 hours notice to the Respondent to have any injunction in this matter discharged and such application shall be set down for hearing as a matter of urgency.

7. that the parties agree that there shall be general power to apply to a single Judge of the Supreme Court upon notice of no less than 48 hours for any application to vary or discharge these conditions or other matters arising therefrom.

Upon Mr. Moti giving the above undertakings, the Court announced that the appeal would be dismissed, and reasons would be published in due course. This Judgment now records our reasons.

Dated at Port Vila, this 26th day of June 1998.

BY THE COURT

> Daniel V FATIAKI
John W von DOUSSA
Reggett MARUM