Court grants interim stay of execution under Debtors Relief Law due to probability of entitlement and risk of irreparable loss.

[*107] 1978 December 20

(BOYADJIS, S.D.J.)

IN THE DISTRICT COURT OF NICOSIA

Antonakis Chr. Solomonides and Others,

Applicants,

v.

Minerva Insurance Co. Ltd. ,

Respondents.

(Application No. 77/78).

Injunction - Interlocutory injunction

- Discretion of the Court - Principles applicable - Section 32 of the Courts of Justice Law, 1960 (Law 14/1960) - Judgment-debtor - Application for relief under the Debtors Relief (Temporary Provisions) Law, 1975 (Law 9/1975) - And application for interim order staying execution of judgment until determination of application for relief - Probability that applicants entitled to relief - Difficult or impossible to do complete justice at a later stage - Application granted.

Practice - Application - Affidavit in support - Order 48 rule 1 of the Civil Procedure Rules.

E. Efstathiou, for Applicants-Debtors.

Ph. Valiantis, for L. Papaphilippou, for Respondents-Creditors.

RULING

The following-ruling was delivered by:-

BOYADJIS, S.D.J.: The three applicants, [*108] two of them being companies of -limited liability, applied jointly for relief under the provisions of the Debtors Relief (Temporary Provisions) Law No.9 of 1975, in respect of their joint judgment debt adjudged in Action No.2832/76 in favour of their creditor-respondent in the present proceedings.

In their statement of claim accompanying the application, the applicants allege that they are merchants and importers of machinery and that they lost almost all their assets valued many thousands of pounds as a result of the Turkish invasion; that their present debt comes within the provisions of Law 9 of 1975 and that they are entitled to relief.

In their Statement of Defence, the creditorrespondent company deny the applicants' allegations that they have been affected by the abnormal situation adding that nothing has been paid on account of the judgment debt dated 6.11.1976 and being for an amount of £2,800.-, plus interest and costs. It is further stated that on 2.9.1978 a writ was issued for the sale of the applicants' movables in satisfaction of the debt. It is finally alleged that in view of the fact that the judgment in the action was given by consent and execution thereof was stayed by consent until 31.1.1977, the debtors are in law estopped from applying for any further relief under the provisions of Law 9/1975.

Together with their main application the debtors filed an ex-parte application for an interim order staying the execution of the judgment in the said action No. 2832/76 [*109] until final determination of their application for relief.

This ex parte application is stated to be based on sections 2 and 32 of the Courts of Justice Law No. 14 of 1960, on Law No, 9/1975 and on the Rules of Court. It is accompanied by an affidavit sworn by a certain Charalambos Philippides of Nicosia, stating to be duly authorised by the applicants to swear it on their behalf. It is therein inter alia deposed that all the facts contained in the statement of claim are true and correct and that the interim stay of execution of the judgment is necessary so that effect may be given to the proceedings for relief instituted by the debtors under the provisions of Law No. 9 of 1975.

On 11.9.1978, having considered the ex-parte application, the Court issued a preliminary order returnable on 30.9.1978 staying the execution of the judgment in the meantime.

The respondent-creditor company, having thus been given due notice of the order, opposed the debtors’ application which was adjourned for hearing first to 7.11.1978 and was then by consent adjourned till today.

The respondents filed a written notice of opposition stated to be based on Rule 9 of the Debtors Relief (Temporary Provisions) Rules of 1975 and on 0.48, r.4 of the Civil Procedure Rules.

The, notice of opposition is not accompanied by any affidavit. Instead, there is a statement on the notice of opposition to the effect that the facts upon [*110] which the opposition is based are contained in the Statement of Defence (to which I have already referred) and also that the affidavit sworn in support of the application does not disclose facts entitling the applicants to the order prayed in their application.

The above is a summary of the facts upon which the Court is to decide whether to make final the preliminary order dated 11.9.1978 or whether to discharge it, in the light of the arguments which were advanced by learned counsel on both sides during their address.

There is ample judicial authority and it is not in dispute that the Court is vested with discretionary power to grant or refuse the preliminary order applied for, and that the matter is governed by s. 32 of Law 14 of 1960 which reads as follows

”32(1) Subject to any Rules of Court every court, in the exercise of its civil jurisdiction, may, by order, grant an injunction (interlocutory, perpetual or mandatory) or appoint a receiver in all cases in which it appears to the court just or convenient so to do, notwithstanding that no compensation or other relief is claimed or granted together therewith:

"Provided that an interlocutory injunction shall not be granted unless the court is satisfied that there is a serious question to be tried at the hearing, that there is a probability that the plaintiff is entitled [*111] to relief and that unless an interlocutory injunction is granted it shall he difficult or impossible to do complete justice at a later stage.

"(2) Any interlocutory order made under subsection

(1) may he made under such terms and conditions as the court thinks just, and the court may at any time, on reasonable cause shown, discharge or vary any such order.

"(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .

Although the discretion of the court is a wide one (see inter alia Consolidated Glass Works Ltd. v. Friendly Pale Shipping Co. Ltd. & Another (1977) 1 J.S.C. 45) and in the exercise thereof it should not he fettered by any strict rules, yet the court ought to exercise it in a judicial manner guided by certain principles laid down in the relevant authorities and giving effect to the actual provisions of the relevant statute. I have considered in this respect the case of Acropol Shipping Company Ltd. & 2 Others v. Petros Rossis (1976) 2 J.S.C. 188.

The applicants are cast with the duty to satisfy the court that:-

(a) there is a serious question to be tried at the hearing;

(b) there is a probability that they are entitled to relief; and [*112]

(c) unless the interlocutory order is granted it shall he difficult or impossible to do complete justice at a later stage.

I shall examine requirements (a) and (b) above together. There are two issues involved in this respect in the present case. The first issue arises from the allegation of the respondents that in the affidavit sworn in support of the application no sufficient facts are disclosed warranting the issue of the order. Learned counsel for the respondent submitted in this respect that the Court cannot examine any part of the record before it other than the affidavit sworn in support of the application. The answer to this submission is to be found in 0. 48, r.1 which reads: -

"... If the application relies on any facts which do not appear in the Court books or records, it shall be supported by affidavit".

The provisions of 0,48, r.1 are applicable in the present case by virtue of Rule 9 of the Debtors Relief (Temporary Provisions) Rules of 1975. It follows that the obligation of the applicants to have tire facts upon which the application is based deposed in an affidavit is limited only to those facts which are not apparent on the record of the Court. This submission was made with particular reference to the failure of the affiant to depose in the affidavit that a writ for the sale of the applicants’ movables has been issued, a fact which is being alleged by respondents themselves in their Statement of Defence filed in these proceedings.[*113]

The affidavit specifically refers to the Statement of Claim the contents of which are stated on oath to be true and correct. Sufficient facts are, therefore, deposed to raise properly the allegations that the applicants have been affected by the abnormal situation. These allegations remain in fact unanswered since the respondents failed to swear any affidavit to the contrary in support of their notice of opposition as is provided in 0.48, r.4 which reads:-

"Any facts relied upon in opposition which are not apparent on the face of the proceedings shall he set out in one or more affidavits accompanying the notice of opposition ".

The respondents have also failed to make use of their right to request the Court under 0.39, r.1 to order the attendance of the deponent of applicants’ affidavit for cross-examination.

The second issue arises from the submission of the respondents' counsel that, upon the correct interpretation of s.2 of Law 9/75, a "forced sale" does not arise by the mere issue of a writ of sale of movables; that further steps, like an inventory of the goods or actual seizure thereof or even further steps ought to have been taken by the deputy sheriff of the Court in execution of the writ of movables before the debtor may file an application for relief under s.3 of Law 9 of 1975; that there is no allegation that any such further steps have been taken in the present case nor is there [*114] any allegation regarding the nature or description of the movable property in respect of which the relief is sought; that, in view of the aforesaid fatal omissions the applicants main application for relief cannot succeed.

The learned counsel for the respondents has thus invited me to examine applicants’ main application in depth and decide at this early stage of the interlocutory proceedings upon a number of legal issues which, if decided in their favour, the main application ought to be dismissed. I do not agree that this is the proper stage for the adjudication by the Court on these legal issues. I do not think that the applicants are under a duty to show at this stage that their main application shall in any case succeed, before they may succeed in their interlocutory application. If they show that their claim is not frivolous or vexatious, in other words that there is a serious question to be tried at the hearing, their onus of proof is discharged by showing what they have to my satisfaction shown in this case, i.e. a probability that they are entitled to a relief. In the Acropol case (supra) Hadjianastassiou, J., adopted the following extract from the judgment of Cotton L.J. in Preston v. Luck (1884) 27 Ch. D. 497, at p. 505:-

"Of course in order to entitle the plaintiff to an interlocutory injunction though the Court is not called upon to decide finally on the right of the parties, it is necessary that the Court should be satisfied that there is a serious question to be tried at the hearing, and that on the facts before it there is a [*115] probability that the plaintiffs are entitled to relief".

If further authority is needed, it may be found in the following words of Lord Diplock in American Cyanamid v. Ethikon

(1975) 1 All E.R. 504; "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. These are matters to be dealt with at the trial".

With regard to requirement (c) above, it cannot be seriously argued that, if the interlocutory order staying the execution of the writ of sale of movables is not granted, it shall not become difficult or impossible to do complete justice at a later stage. If today’s status-quo is disturbed and the judgment debt is satisfied by the proceeds of the threatened forced sale scheduled to be effected in execution of the writ of movables, the main application of the applicants shall remain without any subject-matter and any relief which the Court may in the end grant to the debtors shall have only academic value to them.

Without expressing any opinion upon the merits of the case, I rule for the purpose of this interlocutory application that the applicants have brought their case within the ambit of s. 32 of the Courts of Justice Law No. 14 of 1960 sufficiently to satisfy me that it is just and convenient to make the interlocutory order applied for. [*116]

The order, therefore, dated 11.9.1978, is hereby made final.

BOTH COUNSEL: With regard to costs, we suggest that there shall be no order as to costs.

COURT: The wish of both sides with regard to costs is acceded to: There shall be no order as to costs.

Stay of execution granted.

No order as to costs.