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Trinity Christian Center v Graceland Broadcasting Network [2011] WSSC 47 (16 May 2011)

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU


BETWEEN:


TRINITY CHRISTIAN CENTER OF SANTA ANA, INC d.b.a. as TRINITY BROADCASTING NETWORK
a United States of America Non-Profit Corporation
Plaintiff


AND:


GRACELAND BROADCASTING NETWORK
a Board of Trustees duly incorporated under Part III of the Charitable Trusts Act 1965 having its registered office at Graceland Building, Levili, Matautu, Samoa
First Defendant


AND:


RICHARD MEREDITH and his wife
MARJORIE MEREDITH
both Trustees of Levili, Matautu, Samoa
Second Defendants


Counsel: S Leung Wai for the plaintiff
S Toailoa for the defendants


Hearing: 15 – 17 and 20 December 2010
Written Submissions: 7 March and 17 March 2011
Judgment: 16 May 2011


JUDGMENT OF SLICER J


  1. The background to these proceedings are stated in the decision of Vaai J. in Trinity Christian Centre v Graceland Broadcasting Network and Others delivered on 15 May 2008. In those proceedings His Honour dismissed Graceland's application for orders for security of costs. In his reasons for judgment the learned trial Judge observed at paragraphs 11 and 12:

"11. On the strength of the letter and of the pleadings in the amended statement of defence and counterclaim it would seem that the plaintiff has a meritorious claim in its third cause of action namely that the assets proposed to be sold are trust properly pursuant to the provisions of the Charitable Trust Act 1965. Whether the equipments were gifted or donated to the first defendant by the plaintiff they nonetheless became the property of the trust and could not be sold at the whim of the second defendants who believed in September 2005 that the broadcasting equipments, studio equipments and satellite stations of the first defendant were their personal properties.


12. More importantly the proposed sale would have the effect of defeating the dominant purpose of the trust which was the operation of a television station for the broadcasting of Christian and religious programmes. The plaintiff as a donor to the trust donated equipments for a particular purpose. The purported sale would tantamount to depriving the trust of all its properties essential for the existence of the trust and would render the trustees incapable of exercising their paramount duties of administering the trust property. Pursuant to section 22(1)(b) of the Charitable Trusts Act 1965 the consent of the Supreme Court ought to have been sought. No steps were taken to obtain such consent simply because the second defendants believed the trust properties were their personal properties."


  1. Regrettably the substance of the proceedings did not come back before the Court for hearing until 10 December 2010. A problem is that in the meantime the utility of much of the equipment, the viability of the operations and assessment of respective claimed losses or detriments had significantly altered.
  2. The Plaintiff, Trinity Broadcasting Network ("TBN") is a non-profit corporation registered in the United States of America. Its objects are to prepare, produce and disseminate religious programmes, spreading the Word of God throughout the planet. Its officers claim that it is the largest like organisation in the world. TBN requires strict adherence to the delivery of its message of faith and does not engage in the production of ordinary commercial programming. Much of its activities concern the use of wireless and television media.
  3. It has adopted differing models of operation dependent upon the needs and capacity of a particular state or geographical area. In some instances it will employ an affiliate or partner such as Trinity Broadcasting Network South Pacific (a director of which was Owen Sunnex, a prospective witness not called to attend) in New Zealand, which in turn would conduct maintenance and technical assistance for other organisations within its geographical area. In other cases it would deal with a local service provider or provide a downloading capacity from its satellite service. It would provide basic materials and resources such as VHS taped material in places which lacked sophisticated technology.
  4. Relevant to these proceedings it provided to Graceland:
  5. In turn it required the local organisation to transmit a percentage of its own broadcast material and adhere to the Christian message.
  6. Graceland Broadcasting Network ("GBN") was a trust body incorporated under the Charitable Trusts Act (Samoa) 1965 ("the Act"). It was controlled by the Meredith family and had been established as a successor to or a product of an earlier entity trust entitled Go For Christ ("GFC") founded by Richard Meredith ("Meredith") and Marjorie Meredith, the second named Defendants. GFC was also an incorporated trust under the Act.
  7. In the early 1990's TBN decided to explore the possibility of providing a production and transmission vehicle in Samoa in the furtherance of its own objects. It considered a number of options but rejected the purchase of an existing broadcaster and/or a partnership. Its preferred option was a satellite feed into a transmission network which would carry out its own material directly to the audience. The estimated start up cost was approximately US$350,000 with relatively low maintenance and operating costs. It sent a consultant Len Mitchell, sometimes accompanied by a U.S. resident from Samoa, to examine the technical and geographic aspects of the option. The existing satellite dish which was to be used by GBN was unsuitable for the venture.
  8. During the course of his visit or visits to Samoa, Mitchell met up with Meredith. Meredith was a pastor interested in the advocacy of Christian principles. The initial dealings were between TBN and GFC.
  9. At trial the Plaintiff claimed that Mitchell was not authorised to deal with GFC or Meredith on anything other than technical issues. They maintained that, as a consultant, he had no authority to enter into any agreement or make any representations on property rights or contractual arrangements on behalf of TBN. The contention is rejected. The corporation held him out as an agent clothed with authority (L'Estrange v F. Graucob Ltd [1934] 2 KB 394; Oceanic Sun Line Special Shipping Co. Inc [1975] HCA 24; [1975] 132 CLR 355).
  10. TBN did nothing to disabuse the Defendants of any apparent or implied authority. Its argument is that in any event, since the company entered into a written agreement, it is those terms of which require determination. To that extent TBN adopted Mitchell's dealings. The pleadings of the Plaintiff are those of contract and constructive trust in that the broadcasting or transmission licence is held on trust for the Plaintiff and the sale of any assets unlawful.
  11. There were discussions and negotiations between TBN, directly and through Mitchell, government and Meredith. On 23 June 1992, the Prime Minister wrote to T. M. Hickey, a senior executive of TBN, welcoming a proposal to set up a Christian, and second television station in Samoa. It was never the intention of TBN to obtain a licence from government or establish its own ground studio.
  12. By an Agreement, undated but presumably later than June 1992, TBN and GFC stated their contractual relationship in the following terms:

"1. TBN hereby licenses GFC to operate and maintain the equipment ("the Equipment") described on Exhibits "A1 through A6" hereto exclusively for broadcasting Christian television programs in Samoa.


  1. GFC agrees to maintain and repair the Equipment as needed.
  2. GFC agrees that the Equipment will be used to broadcast Christian television programs produced or provided by TBN, or Christian television programs produced or acquired by GFC.
  3. GFC agrees that fifty percent of GFC's television broadcast time shall feature television programs provided by TBN to GFC.
  4. In the event GFC breaches this contract, or fails to use the Equipment exclusively for broadcasting Christian television programs, TBN may require that the Equipment be returned to TBN."
  5. The contract did not provide for a specified term. It limited use of the equipment exclusively for 'Christian programmes' presumably proscribing any broadcast of a community notice or emergency warning issued by government. It defined the equipment as being limited to those items stated in Annexures A1 to A6. It did not require the Plaintiff to provide any new equipment or to take into account obsolescence. Implicit in the Agreement was a term that TBN was neither a joint partner in the operation nor responsible for the operating costs of the station. It was also implicit that GFC was entitled to produce or copy and transmit one-half of its material either from its own programmes or those provided by others, provided that it continued to maintain they were of a Christian content. The understanding of Trinity was expressed in the terms of a letter from TBN dated 10 February 1995 which included:

"So in considering the matter of the assisting in the establishment of Christian television in Western Samoa, it was never our desire to establish a "TBN owned and operated" station in your country. Perhaps this was a misunderstanding on your part. Such stations are not part of our current international vision. Our goal was to assist Samoans in establishing a facility. Mr. Afatia Lefee and his ministry came to us with his opportunity and indicated they would take on the responsibility of seeing to the operation support of the station. We carefully looked at what we felt we could do. Knowing that Lefee would only be capable of nominal support funding we sought to help him find the lowest cost method of operating the station. A decision was made that if programming could be obtained directly from satellite, then the station could operate not only free of the expense of studio operations and staff, but also of what would surely be a constant expense of purchasing, duplicating and shipping hours and hours of tapes to the country, which would be a direct, ongoing expense to TBN. Then Afatia could pursue local programming resources when the station has sufficient local support to do it.


... So the conclusion we have had to reach on the matter of Western Samoa is that unless someone is willing to step forward and cover the majority of the expenses of the operation of a station, we have no other alternative but to step back and hope that God will ultimately supply someone who will.


... Our desire would be to essentially help Samoans establish their own Christian TV and allow them to support it from then on. We would then step out of the picture and would then limit our involvement to providing a pre-agreed number of hours of tapes programming each week from that time on.


Please consider the matter and if you wish to further discuss the possibility of constructing the station under these conditions, please let me know in what specific and tangible way you are prepared to take on the responsibility of the station once the equipment and technical expertise TBN would provide is phased out and the station is completed."


  1. The original parties continued with their respective, but not necessarily shared, views of the agreement, and could be said to have modified its terms. Some of the dealings or transactions were directly between the parties and others through a director of the New Zealand affiliate or subsidiary entity to TBN.
  2. The first transmission took place in 1998.
  3. TBN raised no objections to the transfer of the equipment, licence and transmission of its own satellite feed from GFC to GBN. It had no objection to the manner in which the 'station operated or its performance of the Agreement clause 4, until 2005 when it was told that Meredith had offered the 'licence and operations' for sale, to another religious ministry for NZ$2.3 million.
  4. The inference drawn by the Court is that officers of the Plaintiff believed that Meredith and/or his family would derive significant benefit from the sale at the expense of their ideals, goodwill and donations provided in the cause of religion. They sought and obtained an interim injunction on 18 November 2005. That injunction stated:

"1) Until further Order of the Court Interim Injunction to issue to restrain the First or Second Respondents from selling or otherwise disposing of the assets of the Applicant;


2) In respect of the second interim injunction that is sought, the motion to be served on the First and Second Respondents."


  1. That injunction was varied on 16 January 2006 which provided a further terms that the Defendants be restrained from:

"...receiving from satellite with the Applicants assets or broadcasting with the Applicant's assets any television programming other than the Applicant's programming and locally produced Samoan Christian programming."


  1. The injunction inhibited the operations of GBN resulting in a loss of income and its eventual demise. The Plaintiff opposed any revocation or amendment to the injunction. The station ceased its transmission in 2008, and the action proceeded to trial in December 2010.
  2. The Plaintiff provided an undertaking as to damages signed by John Casoria, the Assistant Secretary on the TBN Board of Directors. The undertaking was in the terms 'to abide by any order (the) Court may make as to damages in the case the Court shall hereafter be of the opinion that the...Respondents shall have sustained any such damages by reason of any Order of (the) Court may be pleased to make and which the Applicant ought to pay.' The undertaking is relevant to the disposition of these proceedings.

Causes of Action


  1. The Plaintiff claimed in its Statement of Claim of 7 November 2005 that it:

"...allowed the First Defendant to use its assets, namely the broadcasting and studio equipment and television channel licence that was used by GFC to enable the First Defendant to operate a television station.


...allowed the First Defendant to use...


(a) the initial television channel licence the Plaintiff had obtained...

and that the Second Defendants ... offered in September 2005 to sell ... the television station and all equipments thereof including the television channel licence, when part of those assets belong to the Plaintiff."


  1. The Plaintiff claimed that the First Defendant breached the Agreement (made with a different corporate entity) by '(a) failing to properly maintain and operate the Plaintiff's equipment by proposing to sell them and keeping the proceeds thereof; (b) attempting to sell the Plaintiff's equipment and TV Channel licence'. It claimed for its loss 'of its equipment and TV Channels valued at ST$1 million tala.'
  2. The above pleadings are not supported by evidence. Witnesses at trial disavowed any claim of legal ownership, in the licences themselves but persisted with the claim that the corporation retained a beneficial interest and sought a declaration that the First Defendant holds the said TV channel licences on trust for the Plaintiff.
  3. The Plaintiff's pleadings are confusing and multifarious. Distilled they claim legal and equitable bases for remedies claiming:

"(a) Failing to properly maintain and operate the Plaintiff's equipment by proposing to sell them and keeping the proceeds thereof;


(b) Attempting to sell the Plaintiff's equipment and TV Channel licences."

resulting in a claim for damages in the sum of ST$1 million.


(2) Breach of implied terms of a contract.

This included, in the alternative, a plea of acceptance of terms 'not communicated to the Plaintiff' (Statement of Claim, paragraph 6);


OR


Which binds 'the First Defendant is bound as the First Defendant did not communicate to the Plaintiff any dissent therefrom';


OR


'...alternatively the First Defendant honoured the agreement by broadcasting the Plaintiff's programmes and by acknowledging the Plaintiff's ownership of the assets in its financial statements.'


The Court assumes that the last alternate pleading is one of either 'accord and satisfaction' or estoppel (Statement of Claim, paragraph 6).


(3) The Plaintiff had obtained and continued to hold the licence in its operation (Statement of Claim, paragraph 7 (a)).

(4) Breach of trust in that the Plaintiff was the beneficial owner of the licence, entitling it to a declaration (Statement of Claim, paragraphs 13, 14).

(5) Illegality by reason of the Charitable Trusts Act 1965.
  1. The remedies sought by the Plaintiff are:

"(a) An injunction restraining the First and Second Defendants and or their agents from selling or otherwise disposing of the assets of the Plaintiff;


(b) A further injunction restraining the First and Second Defendants and or their agents from receiving from satellite with the Plaintiff's assets or broadcasting with the Plaintiff's assets any television programming other that the Plaintiff's programming and locally produced Samoan Christian programming;


(c) Specific performance and that the First and Second Defendants be ordered to not sell and to return the Plaintiff's assets such as but not limited to the television Channel licences and broadcast and studio equipment, including transmission systems, namely the towers, antennae, transmitters and ancillary equipment);

(d) A declaration that the First Defendant holds the equipment and TV Channel licences on trust for the Plaintiff;

(e) An order that the Plaintiff or some other person to be determined by the Court be appointed Trustee of the trust in the preceding paragraph;

(f) An order that the Second Defendants be removed from the Board of Trustees of the First Defendant and be replaced by representatives of the majority of the Christian churches in Samoa."
  1. The parties then engaged in fruitless exercises in interlocutory steps of strikeout motion, applications for security, opposition to interlocutory proceedings, orders for discover with varying affidavits, replies and ancillary documentations, most of which furthered failed to advance their respective causes or defined the issues. One of those steps resulted in the decision of the learned primary Judge referred to at the commencement of these proceedings. The end result is that of confusion, complication and delay. Presumably much of the equipment provided is obsolescent or aged beyond repair, the television licence defunct or determined by statute, the station has ceased transmitting, the Plaintiff's message received via satellite at no cost to the faithful and the objectives of the TBN unfulfilled. Significantly in Samoa the Plaintiff has not sought the return of any equipment it claims to own as a legal or beneficial interest. The Court has no statutory power under these proceedings to grant the remedies sought through the Orders in paragraphs (e) and (f) in the Statement of Claim.

Defence and Counterclaim


  1. The Defendants by their Second Amended Statement of Defence plead:
  2. And Counterclaim that:

the Defendants are entitled to an award of damages through unjust enrichment and/or abuse of process.


Pleadings


  1. The pleadings, rather than refine and define the issues between the parties seek to engage many aspects of the law of contract, equity and damages, and entangled with the laws of evidence and remedy make determination complex. The pleadings of the parties have not been helpful to the Court in its disposition of these proceedings.
  2. The parties are required to define and be bound by their pleadings (Cross on Evidence, 6 Ed. para. 3160).

The Issues


  1. In light of the evidence, the Court will define the issues brought before this tribunal for determination as:

Appointment of Alternate Trustee


  1. The claimed remedy depends on a misunderstanding of the law. There is no allegation or application for the removal of GBN as a trustee, as an incorporated society under the Charitable Trusts Act 1965. The Court doubts that in these proceedings it has jurisdiction to remove the Second Defendants as trustees of the First Defendant and their replacement by representatives of the majority of the Christian churches in Samoa. The Plaintiff ought to pay regard to the accepted doctrine of the separation of Church and State in the Courts. The pleading suggests retribution than the principles espoused by the Plaintiff's officers in their evidence.
  2. Grounds (e) and (f) of the remedies sought are dismissed.

The Evidence


  1. The Plaintiff claims that it contributed the sum of US$394,260 to the operation of the television station. Its claim that it is entitled to an equitable interest in the licence and all the equipment is weakened by its specific claim that the value of the transmitter alone exceeds ST$500,000. The total contribution by the Plaintiff makes little allowance for the operating costs and contributions made by the Second and Third Defendants and the income generated by GBN.
  2. Much of the evidence was uncontroversial.
  3. Terry Hickey was responsible for the overseas project developments of the Plaintiff which operated some 72 channels throughout the world. He supervised the budget and the overall model used by the corporation ("P3.1 – P3.6"). He confirmed that Meredith was to hold the licence ("P5") and authorised the actions of Mitchell as a consultant with authority including a letter sent by Mitchell ("D1") in March 1996 ("P4") and the respective contractual relationships between Meredith and TBN. His evidence suggests the use of a standard model of assistance rather than continued ownership of equipment. The Plaintiff sought ownership by a local ministry responsible for operation rather than ownership or control of a station. It did not seek ownership or lease of the premises to be used for transmission. He preferred to adapt the model to each Pacific nation state or geographic area.
  4. The model chosen for Samoa was that of sponsorship, startup costs and provision of free material. It rejected becoming a licence holder or entering into a limited partnership.
  5. The Court accepts his evidence generally and that it was his duty to ensure accountability.
  6. Warren Miller, another corporate officer was involved in the engineering and technical aspects of the proposal and the use of Mitchell as a person authorised to determine methods of delivery of the Plaintiff's message or product. He advised a policy which was cooperative rather than one of specific implementation. On his analysis the establishment of a studio, satellite connection and a controlled business template exceeded US$1 million, a model unacceptable to the corporation. Given that the Plaintiff's contribution over 10 years totaled US$394,260 his evidence supports the Defendants' contention that the Plaintiff assisted rather than owned the Defendants' operation. The claim that equipment was loaned might have entitled its return or removal but not an injunction preventing the First Defendant from operating. His evidence suggests assistance or gift rather than continued ownership. The right of return as stated in the agreement, of some of the equipment 'donated' related to permitted use or licence rather than unfettered ownership. Ten years had elapsed between the Plaintiff's provision of electronic equipment and its claimed ownership years after the event.
  7. The Plaintiff was able to identify many of the electronic items supplied to GFC or GBN primarily in the years 1996, 2001 and a significant one, a transmitter ("P6") but in most instances was unable to show that they would have remained usable or effective as at the date of the injunction. Some of the amounts of money injected related to shipping or installation costs. Hickey conceded that some of the items identified in documents "A1 – A5" had been damaged through the impact of a cyclone. Miller confirmed that some of the items provided in 2004 were replacements. His involvement concerned accountability and suitability of equipment and confirmed that as at the date of the injunction there was documentation indicating that many of the items supplied were no longer in use. Further documentation involving Sunnex suggested that some of the items supplied were found to be defective on delivery rather than misuse.
  8. The Plaintiff's evidence does not support the conclusion that it retained ownership of the items supplied to GFC or GBN. It supports the conclusion that it was concerned with the purpose for which its resources would be used namely the propagation of the Christian faith. That in itself did not create an equitable interest in either of the equipment and associated costs of transportation and installation in the television station or its licence.
  9. The negotiations for sale which led to the application for injunctive relief involved transfer of ownership and control to another Christian organisation, the Worship Centre.
  10. Pastor Mafoe Viliamu, a witness on trial, was approached to set up a Christian broadcasting network. He dealt with both Meredith and officers of TBN. He had previously been a member of the GFC organisation, but left because of differences in the method of operations. His Centre continues with its own television programme receiving material provided by TBN. His organisation relies primarily on gifts and donations. He did not proceed with negotiations because of the price required for sale.
  11. Richard and Marjorie Meredith, the principals of GBN both gave evidence. Both had and have an interest in the outcome of these proceedings and a critique of the Plaintiff is that both showed self-interest in their testimony. The Court accepts, in part, that criticism but this case does not depend on their accounts. It primarily depends on documentation and its interpretation and factual matters not in dispute.
  12. The Court accepts that GFC and GBN charged for the provision of programmes to the Worship Centre but given the nature of those programmes each were entitled to do so. The Court accepts that the Merediths had a personal interest in the proposed sale but also that each had provided time, energy, skills and personal resources into the development and operation of an expensive enterprise. The Court accepts that they had covered losses incurred in 2005 and that the injunction proceedings had led to the loss of donations by patrons interested in Christian television. In September 2005 Meredith wrote to Pastor Tavita Pagalekii, the Superintendent of the Assembly of God indicating that GBN would be 'going on the market for sale' ("P9") and that he wished 'to see GBN fall into the hands of the AOG Church because of our long-standing relationship'. The proposed sale was to include '...studio equipment...at Levili...town office equipment, nine transmission sites around Upolu and Savaii...brand new four-wheel drive and the second biggest satellite facility in Samoa located at Afiamalu on 20 acres of lease land.' The sale would include the FM network, not the subject of these proceedings. The letter indicated that GBN was receiving 'three TBN channels, JCTV, TBN and the Church Channel and the Afiamalu satellite dish receives the Hope Channel, ABC, BBC and other channels.' At that time GBN broadcast two TV channels, GBN and the Hope Channel, the latter broadcasting on contract with the Seven Day Adventist.' The majority of the material to be broadcast upon sale would have been the delivery of the Christian message, free from advertising. An irony in the proceedings taken by the Plaintiff was the prevention of the dissemination of that message other than any not controlled by another Christian faith. Significantly the valuation prepared for a market sale showed:
"Equipment and Infrastructure
WST$2,146,826
Labour, licences, leases
WST$ 485,870
Total
WST$7,002,697

  1. At its highest the Plaintiff's contribution over 10 years amounted to less than WST$884,000 much of which involved transportation, consultancies, maintenance and replacement of destroyed or obsolescent equipment. The delivery of the Plaintiff's message to Samoa was at the cost of commission wages and travel expenses alone amounted to WST$48,534.
  2. Integration of equipment such as transmission towers and satellite receiving stations meant that the terms of the injunction prevented any downloading of any programming other than that of TBN or transmission limited to TBN downloading or produced by local Christian organisations. GBN ceased transmitting in 2008. Such would be technically impossible.
  3. The Merediths claimed that they intended to use the proceeds of sale to set up a further charitable trust in New Zealand. The Court accepts that each stood to benefit their family, at least indirectly but the Plaintiff has not shown that the proposed New Zealand venture did not include a future charitable and Christian purpose.
  4. The Attorney General intervened in the course of the evidence given by the Merediths and their accountant but only examined them as to the terms of the trust and its operation. The intervention did not concern the relationship between the parties to this action and is irrelevant to the issues as between the Plaintiff and the Defendants.
  5. The Meredith group continues to operate television channels which show TBN material, but according to the evidence of Marjorie Meredith, do not own any of those channels.
  6. Evidence called by the defence included testimony by George Pitt who incorporated the Star Network who confirmed that the issuing and controlling of licences remained with the Regulator and had a marketable value, and Tuato Ryan who is involved with Hope TV. Their evidence supported the Merediths as to the various models used by the Plaintiff and its provision of donations rather than retention of proprietary rights as claimed by TBN.

Plaintiff's Damages


  1. The Plaintiff claims damages in the sum of ST$1 million for 'the loss of its equipment and TV Channels.' It adduced no evidence of the value of items still in use, or reparable at the First Defendant's expense. If the Court is wrong in its primary decisions, damages could be assessed only on a nominal basis and the Plaintiff would remain responsible for the costs of collection and transportation to New Zealand, the United States or the place of origin. Had the Plaintiff wished to take proceedings against the Defendants at an early stage, they might have chosen an action in damages. It did not and waited many years to bring the action to trial. Instead, it permitted the injunctive proceedings to proceed to a permanent one and concurrently sought damages when the value of the 'misused' equipment long after its provision.
  2. Laches, not pleaded, is a relevant consideration in this assessment of any amount of damages.

Counterclaim


  1. The Defendants counterclaimed seeking remedies for unjust enrichment, illegality and abuse of process. Those claims will be dismissed. The Court will consider the questions of loss or harm in accordance with the Plaintiff's undertaking.

Unjust Enrichment


  1. Samoan cases relevant to this issue include Liaga v Taleni [2010] WSSC 166; Netzler v Sapolu [2010] WSSC 75.
  2. The doctrine of unjust enrichment requires a finding that a party unfairly or wrongly obtained a benefit at the expense of another. In Liaga v Taleni (supra) the Court followed an earlier decision of he learned Chief Justice in Meredith v Manoo (unreported 11 October 2002) when he stated:

"In Meredith v Manoo an unreported Supreme Court decision delivered on 11 October 2002. His Honour the Chief Justice at page 6 stated:


'this Court referred to the formulation of a cause of action for unjust enrichment laid down in the Supreme Court of Canada by Dickson CJ in Rathwell v Rathwell [1978] 2 SCR 436; Pettkus v Becker [1980] 2 SCR 834 and Sorochan v Sorochan [1986] 2 SCR 38. Under that formulation the three requirements for a cause of action for unjust enrichment are: (a) an enrichment, (b) a corresponding deprivation, and (c) the absence of any juristic reason for the enrichment. When applied to the present case that would mean: (a) there was an enrichment to the third party, (b) that enrichment was at the expense of the defendants, and (c) there is no juristic reason for the enrichment. The English formulation of the requirements of the same cause of action as stated by Robert Golf J (as he then was) in BP Exploration Co (Libya) Ltd v Hunt (No. 2) [1979] 1 WLR 783 at 839 are (a) receipt by the defendant of a benefit (b) at the plaintiff's expense, (c) in such circumstances that would be unjust to allow the defendant to retain the benefit."


  1. In Public Trustee v Fokeni Brown WSSC unreported (referred to in Liaga (supra), the Chief Justice added, as a criteria, a fourth element as stated in the Canadian decision of Pettkus v Becker [1980] 2 SCR 834.
  2. Here there has been no evidence of enrichment to the benefit of the Plaintiff. It may have attempted to defend its name and integrity (as claimed by its officers) or attempted to punish the Second Defendants for a perceived breach of integrity. Irrespective it received no economic enrichment at the expense of any of the Defendants.
  3. The claim, in equity, is dismissed.

Illegality


  1. There may have been breaches of statute by one or all of the parties. Intervention by the Attorney-General as amicus curiae and the holding of an investigation might suggest breach of or non-compliance with statute but such is not relevant to the disposition of these proceedings.

Abuse of Process


  1. The Court accepts and applies the relevant principles as stated by Lord Steyn in Gregory v Portsmouth City Council [2000] UKHL 3; [2000] AC 419. But here the question of tort or the malicious institution of the legal process is not the issue. The Plaintiff may have been aggrieved by what it perceived as an intended sale or transfer of a means of the dissemination of the Christian message although it paid little account to the fact that it was to be transferred to another Christian based institution. But here the Court pays regard, not to malice, but to the effect of its undertaking. The Plaintiff's contention that its position is supported by the observations of Vaai J. (supra) that its claim had merit is of little import. His Honour was determining a matter involving the provision of security for costs which in turn was partly governed by the pleaded claim that the Plaintiff was the legal and beneficial owner of the licence. Here the issue is the effect of an undertaking not a claim in tort.

Effect of Undertaking


  1. Counsel ought to be aware of the distinction between an interim and an interlocutory injunction. The undertaking principles are similar but the effects and their consequences can be significant. An interim injunction protects immediate harm. An interlocutory injunction may govern the relationship of the parties for a significant period of time with ensuing effects and consequences. Here the Plaintiff chose to pursue its cause and maintain its order of a long period of time. It affected the demise of the operations of the First Defendant and persisted with its claim for injunctive relief and damages. An undertaking is not a procedural formality to be lightly undertaken (Cardile v LED Builders Pty Ltd [1999] HCA 18; [1999] 198 CLR 380).

Assessment of Loss Occasioned Through Undertaking


  1. The undertaking was made in 2005. In order to determine the effect of the injunction on the company it is necessary to consider its financial standing at the varying times of the operations.
  2. In 1998/1999 the relevant figures as set out in the annual accounts were:
1998
1999

Receipts
Radio Sponsors
$39,437
$56,088
TV Sponsors
$27,195
$37,556
Donations
$4,266
$24,430
Total
$70,898
$118,075

Expenditure
$69,277
$106,077
Trust Funds
$4,221
$29,118
Fixed Assets
$2,600
$15,000


2001
2003
Radio & TV Sponsors
$193,542
$125,992
Donations TBN
$175,226
$24,510
Expenditure
$364,861
$173,617
Trust Funds
$290,897
$198,626
Fixed Assets
$317,933
$215,525


2005
2006

Receipts
Partners & Donations
$66,393
$27,767
Hope Channel Lease
$60,000
$60,000

2005
2006
Funds from Trustee
$156,950
$159,560
Productions
$14,800
$13,500
Lau TV
$9,900
Expenditure
$29,6965
$27,1212
Fixed Assets Cost Price 1998 – 2004 of $447,810 as Depreciated at 20%
$59,215
$44,251

  1. The interim injunction was obtained in 18 November 2005 and varied in 16 January 2006. The company ceased its transmission in 2008. The evidence is that the injunction had destroyed the viability of the company. The Court has little, if any, evidence of economic loss or figures for the period 2007 – 8. On one analysis it was running at a loss in 2006 although it notes a significant reduction of trust funds by over $200,000 between 2003 – 6 from $282,550 to $75,697. That reduction in accounting terms could explain the 'book' loss in the accounts and reduce 'subsidy' by the trust.
  2. The trust funds shown as funds in the statement of assets was reduced from $133,735 to $33,961 between 2004 and 2006. Conversely the same statement showed that funds 'donated by the trustee' for 2006 was $159,560. Meredith claimed that the loss was increased by the loss of trust or confidence by donors following the injunction.
  3. The problem caused by the above analysis is that the operations of GBN were non commercial in nature and an estimate of loss of projects calculated through the income stream.
  4. A complication on any assessment based on an undertaking is that it was the incorporated GBN which directly suffered the loss. The Second Defendants only suffered a loss indirectly through any debts such as lease or employment payments or the return of loans to their personal trust.
  5. The third problem concerns debts owed by the First Defendant to their parties such as contractors, suppliers and the like, who can only look to this component of 'damages arising from an undertaking' and cannot make any assessment.
  6. The Court will use the period of 5 ½ years in its calculation of loss. It accepts that some of the returns involve calendar year calculations (January – December) which conflict with the injunction dates (November – January 2000). It will use the decline of partners and donations as its basis for calculation, namely a reduction of $66,393 to $27,767 for the years 2005 to 2006 stated above. The Court will adopt a broad brush approach.
  7. It will assess damages in accordance with the undertaking as follows:
  8. The award is assessed through the undertaking in the sum of $365,000.
  9. The parties are given leave to make submissions as to consequential orders within fourteen (14) days of the date of this judgment. The intent of the charitable incorporated body should benefit from the judgment.

Conclusion


  1. The Plaintiff's claim for legal and equitable orders is dismissed. The Statement of Claim is dismissed. The remedies sought in the Counterclaim are dismissed. The loss occasioned by the grant of an interim injunction is assessed in the sum of ST$365,000.

ORDERS


(1) The action and application for equitable relief is dismissed.
(2) The counterclaim for damages is dismissed.
(3) The undertaken given and authorised by the Plaintiff is enlivened and the damages resulting from that undertaking are assessed in the sum of $365,000.
(4) The Plaintiff is to pay the costs of each Defendant in a sum to be agreed or assessed by the Court.
(5) The parties have leave to make submissions as to consequential orders.

_____________________
JUSTICE SLICER

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