Tuna Fishing (Vanuatu) Ltd v Government of the Republic of Vanuatu [2008] VUCA 3; Civil Appeal Case 04 of 2008 (30 April 2008)

IN THE COURT OF APPEAL OF
THE REPUBLIC OF VANUATU
(Civil Appellate Jurisdiction)

Civil Appeal Case No. 04 of 2008

BETWEEN:

TUNA FISHING (VANUATU) LIMITED
Appellant

AND:

THE GOVERNMENT OF THE REPUBLIC OF VANUATU
Respondent

Coram: Hon. Chief Justice Vincent Lunabeck
Hon. Justice Bruce Robertson
Hon. Justice Oliver Saksak
Hon. Justice Christopher Tuohy
Hon. Justice John Mansfield

Counsels: Mr. Robert Sugden for the Appellant
Mr. Ari Jenshell for the Respondent

Date of Hearing: 22 April 2008
Date of Decision: 30 April 2008

REASONS FOR JUDGMENT

Tuna Fishing (Vanuatu) Limited (TFV):-

(1) seeks leave to appeal from an interlocutory decision of 2 August 2007 restraining it from continuing to construct a fish processing plant on certain land in Port Vila in registered survey plan 11/OA23/062. owned by the Government of the Republic of Vanuatu; and

(2) seeks an order against the Government calling on it to show cause why the Government should not be dealt with for contempt of Court for failing to comply with an Order of the Court of Appeal made on 30 November 2007.

As is often the case, those two issues have a complex background. As we indicate below, we are satisfied they might have been avoided by more common sense and practicality on the part of both parties.

In 2007 TFV wanted to construct a fish processing plant on the land. In April 2007, it entered the land and started to build the plant. It did not then have a lease to enter on the land, but it says (through counsel) that it has permission to do so. The Minister of Lands came to learn of the building work on the land, and in June 2007 wrote demanding that TFV stop the building work and vacate the land. TFV could have explained (as it claims) that it had permission to go onto the land, but instead it responded that it had been delayed in getting its anticipated lease of the land by delay and obstruction of officers of various departments of Government. On its face, that was an inappropriate and unnecessarily provocative response. It led the Government on 12 July 2007 to bring an action in the Supreme Court against TFV for trespass, and sought an interlocutory injunction restraining TFV from continuing the building work until its trespass claim had been decided. Subsequently, TFV has counterclaimed for damages in that action, but on grounds which presently only incidentally relate to the trespass claim against it.

On 2 August 2007, a judge of the Supreme Court made the restraining order which is the subject of the first issue above. At that time, TFV’s defence did not allege any facts which might have amounted to permission for it to enter the land and build the plant on it. Rule 4.4 (4) (b) of the Supreme Court Rules requires that it should have done so. (It appears to have addressed that defect in its pleadings – subject to any issue as to particulars – in its amended defence filed on 11 October 2007.) Nor did TFV produce any evidence to the judge to show it was on the land with permission.

Then, on 3 September 2007, TFV applied to strike out the action itself, in essence because (TFV claimed) the action had been started without proper instructions and because the statement of claim did not disclose a cause of action. That application was successful on 31 October 2007. By leave, the Government appealed to the Court of Appeal from that decision. That appeal came on for hearing at very short notice in the November session of the Court of Appeal. Mr. Sugden was indignant that the Court of Appeal should entertain this appeal at short notice, but his client’s application was not scheduled for hearing. The Court suggested the parties should seriously consider their positions.

The parties agreed upon orders and on 30 November 2007, the Court of Appeal by consent made the following orders (so far as relevant to the present issues):-

"(1) The Appeal is allowed with costs to the Appellant to be assessed by the Judge in the Court below if not agreed.

(2) The Order made on the 2nd of August 2007 by the Court below restraining the Respondents from trespassing on the land or building on the land is suspended until further order upon the basis of the Respondent undertaking to give security as agreed between the parties.

(3) The Respondent is not to commence operating the Fish Processing Factory unless consent to do so is given by the Appellant.

(4) There is liberty to both parties to apply generally to the Judge in the Court below, including as to the security referred to in Order 2 or any substituted security."

The proposed security was over goods apparently to the value of US$170,000.00 then held in two shipping containers at the main wharf. The lawyers for TFV provided to the lawyers for the Government a proposed form of undertaking in respect of that proposed security. It contemplated that the undertaking would be signed on behalf of TFV and on behalf of the Government. It was in a form which was materially similar to that ultimately proposed by the Government through its lawyers. TFV then re-entered possession of the land and resumed its building work.

There was then a series of communications from the lawyers for the Government requiring TFV to sign that undertaking, or a variation of it with immaterial changes. It was not signed. An ultimatum was given by the Government by its lawyers to TFV on 10 January 2008 that if TFV did not return the signed undertaking, it would be ejected from the land. That happened on 16 January 2008.

In the meantime on 19 December 2007, TFV appears to have been granted a lease over the land by the Minister of Lands under the Land Leases Act.

On 12 February 2008 TFV brought a separate action against certain public officers involved in its removal from the land on 16 January 2008 for orders that it be permitted to re-enter the land and resume the building work. We were told that this action would also be used as a vehicle to claim damages for wrongfully being removed from the land.

The next and final event of significance for current purposes is the application by TFV to this Court for an order against the Government to show cause why it should not be dealt with for contempt for having evicted TFV from the land on 16 January 2008 in the face of the Orders made by this Court on 30 November 2007.

We turn to consider the two applications.

The Consent Orders made by this Court on 30 November 2007 are still in force. Order 2 suspends the interlocutory injunction granted on 2 August 2007. Consequently the question of leave to appeal from that order of 2 August 2007 does not need to be considered. We should, however, say two things about the primary contention of TFV on that issue.

TFV submitted that there was no evidence upon which the Supreme Court could have been satisfied that the Government had not permitted TFV to enter the land and start building the fish processing plant on April 2007. In our view, that submission is erroneous. The Government said both in its statement of claim and in the main affidavit in support of the interlocutory injunction that TFV’s entry on the land was unauthorized. That affidavit was sufficient for the Court to be satisfied of the existence of a serious question to be tried as to whether TFV was trespassing on the land. If TFV wished to assert that it had permission to enter and build on the land, it had to plead the facts that it relied upon and to present evidence to demonstrate that permission. There was no such pleading, and no such evidence, to entertain that assertion.

Secondly, it follows that, in our view, the decision to grant the interlocutory injunction on the material before his Honour was correct.

The obstacle to TFV entering and remaining on the land after 30 November 2007, on the case of the Government, was that TFV had not provided an undertaking to give security in the terms agreed. There was clear agreement about the nature of the security to be given. The only step required to be taken to perfect that undertaking was the signing of the undertaking in the form which, on the material, was acceptable to the parties. Why that undertaking was not signed is not satisfactorily explained. We were informed by counsel that it has now been signed, so presumably TFV may now resume possession of the land and the construction of the plant. It is an arguable question whether the undertaking needed to be signed, but on balance, in our view, it should have been signed by TFV to avoid any uncertainty but a failure was not of fundamental significance.

We are not prepared to make an order calling upon the Government to show cause why it should not be dealt with for contempt in the circumstances. It had agreed upon the form of security when the consent orders were made on 30 November 2007. It was insistent upon the security undertaking being signed by TFV. That was not unreasonable. It is also arguable whether the lifting of the interlocutory injunction by order 2 of the Consent Orders made on 30 November 2007 had come into force before the security undertaking was signed. As the form of security had been agreed between the parties, and the Order said the consequence of giving the security was that the injunction was lifted, the only issue was whether the security undertaking had been given by it being proferred in the form of a document to be signed or whether it had to be signed. Its form provided for it to be signed.

The power to deal with a party for contempt is one which should be exercised with great care. The terms of the order which is said to have been disobeyed, or not complied with, must be clear and unambiguous: See Iberian Trust Ltd. v. Founders Trust and Investment Co. Ltd. [1932] 2 K. B. 87. It must also be proved clearly that the order deliberately had not been complied with: See Re Bramblevale Ltd. [1970] Ch. 128.

We consider that the consent order proposed to the Court, and then made by the Court on 30 November 2007, left room for debate about whether a signed security undertaking had to be given by TFV, and there was room for the Government to believe that order 2 of the orders made on 30 November 2007 had not been enlivened until a signed security undertaking had been given.

For those reasons, we refuse to make the order sought by TFV calling on the Government as to why it should not be dealt with for contempt of Court.

There remains the question of costs. TFV did not ask for costs, but the Government sought costs against TFV. TFV could easily have avoided the problems which arose in January 2008, simply by signing the security undertaking. It is unclear why it did not do so. The Government could also have avoided those problems. The form of security had been agreed upon between the parties. In our view it should then have applied under Order 4 of the Orders of 30 November 2007 about what should have been done when the proposed form of security undertaking (which was in an acceptable form) had been given promptly but had not been signed. Order 4 of the Orders of 30 November 2007 gave liberty to apply generally, and as to the agreed form of security. It was not confined to reviewing the nature of any proposed substituted security. The appropriate action on the part of the Government was to have applied to the Court to determine what should have been done when the signed security undertaking was not provided.

Consequently there should be no order as to the costs of either matter before the Court because each party, acting sensibly, could readily have avoided the issues arising. Any party which unnecessarily escalates Court proceedings does so at their own cost and should not expect any contribution from the opposing party.

We trust that the parties will now concentrate their efforts on getting the real disputes between them heard. Central to that would appear to be the validity of the lease dated 19 December 2007, if there is any question about its validity.

If it is valid, then at least from its date, TFV would appear to be entitled to be on the land and to build the fish processing plant. It may then be unnecessary for the parties to litigate whether, between April and December 2007, TFV had permission to be on the land, depending upon whether the Government asserts that in that period of time it suffered loss by reason of the trespass of TFV, if it was a trespassor during that period.

If the lease is not valid, TFV will in a practical sense have to present its evidence to show that it was and remains entitled to be on the land on some other basis.

DATED at Port Vila, this 30th day of April, 2008.

BY THE COURT

Hon. Vincent Lunabeck CJ.
Hon. Bruce Robertson J.
Hon. Oliver A. Saksak J.
Hon. Christopher Tuohy J.
Hon. John Mansfield J.