(1987)1987December23 [A LOIZOU DEMETRIADES SAWIDES JJ ] Ν P. LANITIS CO LTD , Appellants - Defendants 3. ν MICHAEL PAVLOU, Respondent-Plaintiff (Civil Appeal No 7102) Injunction — Interlocutory injunction — Balance of convenience Evidence — Finding of fact by a Judge of theSupreme Court in a recourse under Art 146 1 of the Constitution — Judgment reversed on appeal on different ground — Whether in considenng an application for an interlocutory injunction in a civil action tnal Judge could rely on such a finding — As 5 plaintiff's (applicant's) allegation as to the existence of such a fact was hotly contested by one of the defendants (respondentsin the application), ι e the presentappellants, the tnal Judge could not rely on suchafact Defendants 5 in the action granted a first mortgage on a plot of land in Nicosia in favour of Kykko Monastery for £27,000 plus interest at 9% and a 1 0 second mortgage in favour of appellants for £41,537 050 mils plus interest thereon at 9% As Defendants 5 failed to honour their obligations under the mortgage, appellants brought action 1823/72 and obtained judgment for the debt and order for the sale of the mortgage property In addition to their mortgage, 15 appellants filed, also,a memorandum,and thenappliedtotheD L Ο forthe sale of the aforesaid property The D L Ο , acting presumably under the Immovable Property (Restnction of Sales)(Amendment) Law 1966 (Law 60/ 66) finally fixedthe reserved priceat £162,000 Defendants 5 challenged the decision by a recourse under Art 146 of the 2 0 Constitution Malachtos,J annulled the decisionon thegroundthatthe local inquiry, which was made beforethesubjudice decision,hadnotbeen earned out in the presence of the local authonty The decision of Malachtos,J was reversed on appeal on the ground that the impugned decision was in the domain of private law Since then, on several occasions the D L Ο fixed a day for the sale of the property in question, but, on each occasion, the sale was postponed by reason of Court proceedings taken by defendant 5 554 1 C.L.R. 5 Ν. P. Lanltis Ltd. v. Pavlou Finally the salewas refixed on 19 85 On 12 8 85 the respondent in this appeal who isone of thejudgment creditorsof defendants 5 brought Action 7465/85 in D C Nicosia praying inter alia for adeclaration that the reserve pnce fixed by the Land Registry Office at £162 000 -issubstantially low On the same day he applied ex-parte for an intenm order postponing the sale and directing the stay of same tillthe finaldetermination of theaction Such applicationwasgrantedandtheapplicationwasfixedforheanngon27 8 85 10 15 20 25 Afterahotlycontestedheanng theCourt made af:nalorderinthetermsof the application restraining appellants from enforcing the compulsory sale and postponingthe sate till the final determination of the action Hence the present appeal In reaching the decision appealed from the tnal Court relied on two grounds l e that the local inquiry which precededthe decision whereby the reserve pnce was fixed had not been properly earned out and that the balance of convenience militated in favour of granting the interlocutory injunction Held allowing the appeal
(1)The allegation that the local inquiry was earned out in the absence of the local authonties was hotly contested by appellants In examining this issue the tnal Judge did not deal with the conflictingallegations of the parties,beforehim butreliedon thefindingofthe first instance said Judgment of Malachtos J This Court reached the conclusion that something which was said in ajudgment theeffectof v.hich was nullified by the Full Bench on appeal without any evidence on this conflicting issue could not by itself be sufficient ground for granting the interim order The tnal Judge did not view the facts in this respect in their proper perspective
(2)Inreachinghisconclusiononthebalance ofconvenience itappearsthat thetnalJudgefailedtotakeintoconsiderationandweigh properlyinhismindthefollowing factswhich were before him 30 35 40 (a)The factthat the interest on the capital ofthe mortgagesin favour ot the Holy Monastery of Kykko first mortgagee and the appellants second mortgagees had since a long time accumulated as to double the amount oi the capital and that,eversince,no interest can be charged (b)The factthat there hadbeen long andabortive proceedingssince 1973 by respondent 5 either alone or together with other creditors of his and on one occasion by the prespntrespondent,alwaystaken on the eve ofthe date ofthe salefixedby the D L Ο in an effortto have such salecalledoff (c) That the respondent as one of the judgment creditorsof defendant 5, never raised any objection to the reserve pnce and waited till all efforts of defendant5 failedandafew daysbeforethesalefixedbytheD L Ο instituted thepresentproceedings 555 Ν. P. Lanltis Ltd. v. Pavlou
(1987)(d)Thequestion whethertheproceedings sofar taken inrespect of thesale of the property might have savoured of anabuse of theprocess of theCourt directed towards thefurther postponement of the sale. Appeal allowedwith costs. Appeal. 5 Appeal by defendants No. 3 against the order of the District Court of Nicosia (Nikitas, P.D.C.)dated the 15th January, 1986 (Action No. 7465/85) whereby they were (
- a)restrained from enforcing an order of the DistrictCourtof Nicosia for thesale of a building site mortgaged by its owners in their favour and (
- b)an 10 order staying the sale by public auction of the said property and postponing it from 1.9.85when itwas totake place untilthe final determination of theaction. A. P.Anastassiades, for the appellant. A. Markides, for the respondent. 15 Cur. adv. vult. A. LOIZOU J.: The judgment of the Courtwillbe delivered by Mr.Justice Sawides. SAWIDES J.: This is an appeal from an order of the District Court of Nicosia (S. Nikitas, P.D.C.) in Action No. 7465/85 20 whereby(
- a)appellants (defendants3 intheCourtbelow) were restrained from enforcing anorderof theDistrictCourtof Nicosia,dated24th October, 1972, in Action No.1823/72 for the compulsory saleof a building site mortgaged by its owners in favour of appellants. 25 (b)An order was made staying thesale by public auction of the said propertyandpostponingitfrom 1.9.1985when itwas fixedto take place till the final determination of theaction. Action No.7465/85 was brought by respondent in the present appeal against the following persons as defendants:1. 2. 3. 4. 5. 6. The Attorney-General of the Republic, The DistrictLand's Officer, N.P.LanitisCo. Ltd., The Directorof Lands and Surveys Department, M.D.M. Estate Developments Ltd., Kyriacos Kyriacides, of Nicosia. 556 30 35 1 C.L.R- Ν.P. Lanitis Ltd. v. Pavlou S a w i d e s J. Theappeal was filed only by defendants 3. Noticeof theappeal was served on all defendants as interested parties but none of them participated at the hearing of the appeal. Counsel for appellants infact madeastatementonbehalf of defendents 1,2,4 5 and6thatthey agree with thearguments putforward by himinthe Court below and for the grounds which he raised on appeal but they did notwish to participate inthe proceedings. Also, counsel who appeared onbehalf of defendant 5,after informing theCourt that his client is in agreement with the position of respondent10 plaintiff, applied for leave to withdraw. The factual background in so far as relevant to the present appeal andwith which we shallhave todealatsome length dueto the natureof the case, isas follows:· Defendant 5, a development company,began thebuilding of a 15 block of flats on a plot in Prodromos quarter,Ayii Omologhitae, Nicosia, but as it ran into debt and was unable to complete it,it granted a first mortgage in favour of the Kykko monastery, in the sum of the £27,000.- with interest at 9 per cent and a second mortgage in favour of N. P. Lanitis Co. Ltd., appellants, in the 20 sum of £41,537.050 mils, plus interest at 9 per cent. Appellants brought Action No. 1823/72 in the District Court of Nicosia against defendant 5 on 27th March, 1972 for the recovery of the above sum and also for the foreclosure of the mortgage due to them, and on the 23rd October, 1972 they obtainedjudgment by 25 consent as per claim and costs. Upon obtaining such judgment, appellants filed also a memorandum in addition to the mortgage already existing in their favour. Thereafter appellants applied to the DistrictLand'sOffice of Nicosia,briefly tobe referred toasthe D.L.O., for the sale of the property in question, in satisfaction of 30 the judgment -debt. The D.L.O. carried out a local inquiry and presumably acting under section 4 of the Immovable Property (Restriction of Sales) Law, Cap. 223, as amended by the Immovable Property (Restriction of Sales) (Amendment) Law, 1966, (Law 60/66) fixed the reserve price of the building site in 35 question at £1,500.- and by letter dated 14.2.1974, notified all parties concerned. By letter dated 5.3.1974, the respondent applied to the District Lands Officer for a review of the reserve price. Inthesaid letter,therespondentinformed theDistrictLands Officer thatonthesaid buildingsitetherewere underconstruction, 40 and almost at the completion stage, 27 flats. As a result, a reassessment of the reseve price was made by the D.L.O. 557 S a w i d e s J. Ν.P.LanitisLtd. v. Pavlou
(1987)and itwas fixed at£136.000. By letterdated 18.4.1975theD.L.O. informed all parties concerned, such parties, under section 5
(1), being the debtor and every creditor, that the sale of the property in question was fixed for 15.6.1975 and about the reserve price fixed inrespect of such property. 5 The respondent in this appeal was one of the creditors who presumably has been notified by the Director, as he had a judgment in his favour against defendant 5 secured by memorandum 278/73 already charged on the said property. Upon representations made by defendant 5, the Director of 10 Lands and Surveys, instructed the District Lands Officer of Nicosia, to call off the sale of the property and tocarry out a new local inquiry as soon as possible, in order to reassess the reserve price. The D.L.O. in compliance with the above instructions, called off thesale and after carrying out anew local inquiry, fixed 15 the reserve price at £162,000.- and by letter dated 9.10.1975 notified all interested parties accordingly. In the meantime, defendant 5 filedanapplicationon 10.5.1975, intheDistrictCourt of Nicosia, under the Debtors Relief (Temporary Provisions) Law of 1975, for an orderof theCourttostay thesalewhich was abom 20 to take place on 15.6.
- On 13.2.1976, when thatapplication came on for hearing before theDistrictCourt,an order was made staying the sale of the said property till31.10.
- The sale was subsequently fixed on 12.6.1977 and a notice dated 20.5.1977 was sent to all interested parties by the D.L.O. informing them 25 accordingly. On 3.6.1977, defendant 5, through its advocate, addressed alettertotheDistrictLandsOfficer, asking for thefixing of a new reserve price and/ortoreview the already fixed reserve price,for thereasons statedtherein.Thesalewas called off andon 27.6.1977 a new local inquiry was earned out and the reserve 30 price of the property in question was fixed at£162,
- - and by letter dated 16.7.1977 the DistrictLands Officer informed all the interested parties accordingly. Defendant No. 5 having felt aggrieved by such price, filed Recourse No. 212/77, in the Supreme Court,challenging such decision. 35 An objection as to the jurisdiction of the Court on the ground that the sub judice decision was notinthefieldof public law, was raised which, however, was decided infavour of defendant 5.The learned trial Judge proceeded and annulled the sub judice decision on theassumption thatthelocal inquiry was notproperly 40 carried out {MDM. Estate Developments Ltd. v. The Republic 558 1 C.L.R. Ν.P. Lanitis Ltd. v. Pavlou S a w i d e s J.
(1980)3 C.L.R. 54. The decision in the above the recourse was reversed onappeal andapplicant'srecourse was dismissed onthe ground thatas thefixingof the reserve price under Cap. 223 was a matter of private law, thejurisdiction of the Court under Article 5 146 could not be invoked. (See The Republic v. MDM Estate Developments Ltd.
(1982)3 C.L.R. 642). Subsequently, the D.L.O. fixed the sale of the properly on 16.1.1983 and informed all interested parties accordingly. Defendant No. 5, on 29.12.1982, filed an application before the District Court of 10 Nicosia, under the DebtorsRelief Law, for thestay of the sale, on the ground that defendant 5 was a stricken debtor. An interim orderwas granted, directingthecalling off of suchsaleand its stay. As aresult of such interim order thesale was called off. The application came up for hearing before the Court on 15 12.2.1983 and a settlement was reached in the presence of the authorized agent of defendant 5, whereby stay of execution was agreed till after the 15th of July, 1983 and if defendant 5 paid on or before such date £20,000.- against interest already accrued, then therewould be afurther stay of execution till30.10.
- As 20 aresult,anorderwas madefor thecompulsory saleoftheproperty subject tothe terms agreed. Defendant5 failed topay the agreed sumof£20,000.-, andtheD.L.O.proceededandfixedthedatefor the sale of the property on 31.7.
- Shortly before such date and infact on the 26th July, 1983, defendant 5 together with one 25 NicosSerettis, alleged creditor of defendant 5, brought an action against defendant 3 and the Republic (Action No. 4325/83 inthe District Court of Nicosia), claiming to set aside the settlement reached on 12.2.
- An interimorderwas sought together with such application, which was granted on 28.7.1983, returnable on 30 6.8.1983and calling off thesaleof theproperty which was totake place on 31.7.
- After a hotly contested hearing, the Court discharged the interim order on the ground thatthe Court could notsee thatthe plaintiffs couldpossibly have any «visiblechanceof success inthe 35 action».Thereafter, theD.L.D.proceededandfixedthesaleofthe property on the 17th June, 1984, with a reserve price fixed at £162,000.- and as on all previous occasions, informed all interested parties accordingly. Four days before the date of the sale and in fact on the 13th June, 1984, the respondent in this 40 appeal, apparently being a creditor who had obtained judgment against defendant 5andhadalready lodged amemoin1973, filed «W S a w i d e s J. Ν.P.Lanitis Ltd. v. Pavlou
(1987)an appeal to the District Court,against the reserve price fixed by the D.L.O. Upon filing his appeal, he applied and obtained an interim order prohibiting the sale by public auction of the subject property. Due to the urgency of the matter, the Court dealt with the application on the 16th June, 1984 and gave its decision dismissing the application, on the ground that the applicant had not satisfied the Court that his appeal had a visible chance of success. 5 In view of the pendency of the above proceedings, theD.L.O. postponed thesaleand refixed iton the 1st September,
- On 10 12.8.1985, the respondent in this appeal, brought Action No. 7465/85 in the District Court of Nicosia, praying, inter alia, for a declaration thatthereserve price fixed by theLand Registry Office at£162,000.- issubstantially low. Onthesame day, he applied exparte for an interim order postponing the sale and directing the 15 stay of same till the final determination of the action. Such application was granted and the application was fixed for hearing on 27.8.
- After a hotly contested hearing, the Court made a final orderin the terms of the application, restraining appellants from enforcing 20 the compulsory sale and postponing the sale till the final determination of theaction.Hence, thepresent appeal. The learned trial Judge in his decision summarized the arguments advanced by counsel on both sides and proceeded to examine whether, in the circumstances of the case and bearing in 25 mind the approach of the courts, as expounded in a line of cases decided by this Court,the interim order should be granted. In reaching his decision he relied mainly on two grounds which he considered asjustifying the granting of the interim order. Thefirst ground was thequestion as towhetherthelocal inquiry 30 was carried out inthepresence of thelocal authorityas prescribed by the law. On this issue, he had before him the affidavit of the respondent in support of his application for the interim order in which under paragraph 19 he alleged that the local inquiry was carried out by the Lands Office in the absence of the village 35 authority. Such allegation was hotly contested by appellants and in fact intheaffidavit of oneoftheirmanagers underparagraph 20 such allegation isspecifically denied and isfurther contendedthat the respondent had no right atsuch latestage toraise such matter 560 1 C.L.R. 5 10 15 20 25 Ν.P. Lanitis Ltd. v. Pavlou S a w i d e s J. and that he was estopped from relying on such allegation. The learned President in examining this matter did not deal with the conficting allegations of the parties but relied on thejudgment of the first instanceJudge in Recourse 212/77 thatsomething might have gone wrong m this connection. Infact, he had this to say in thisrespect:«Counsel for defendant 3 submits that the judgment of Malachtos J., cited supra, having been overruled on appeal for lack ofjurisdiction, does notproduceany effect whether as a res judicata or for any other purpose. And counsel supported this proposition by a number of passages from Halsbury. The conclusion of the learned justice in regard to the local inquiry carried out by the L.R.O., so the argument runs, must therefore, be totally ignored for present purposes; and since no fresh evidence has been adduced the plaintiff's allegations on the matterought tobe disregarded. Undoubtedly theprinciple invoked iscorrect,buttheCourt can always look at the judgment to see what was in issue between the parties. Besides jurisdiction the case turned on the issue of the presence of the local authority and itsrole at the local inquiry as prescribed by section 6
(3)of Cap. 223 and the finding of the Court is, to my mind, an indication that something may have gone wrong in this connection. In my judgment there ishere aserious question tobe tried, namely, one for which there is some supporting material, as to the validity of the local inquiry that preceded the fixing of the reserve price.» We find that the learned trial Judge in reaching his conclusion on this issue and relying on something which was said in a 30 judgment, the effect of which was nullified by the Full Bench on appeal, without any evidence on this conflicting issue, could not by itself be sufficient ground for granting the interim order. The learned President did not view the facts in this respect in their proper perspective. 35 The second ground on which he relied was the balance of convenience which, in the circumstances, he found to weigh in favour of therespondent. Hehad thistosay inthis respect:Looking at the whole of the circumstances in the present case I think that the balance of convenience and justice 561 Sawidaa J. Ν.P.LanitisLtd. v.Pavlou
(1987)requires that Ishould make an interlocutory injunction The grounds advanced for refusing theremedy appear tome tobe somewhat vague and general. There is no valid reason to suppose that defendants would suffer greater hardship by an injunction should they ultimately succeed in the action. I should perhaps add that I am conscious of the fact that the matterhasbeen pending intheCourtsfor quite a considerable time. But I do not consider that a sufficient reason for depriving a citizen of the means of having his rights properly determined by the Court». 5 Inreaching hisconclusion onthisground thelearned trial Judge dealtwith an argument advanced by counsel for defendant 6 who was also opposing the application for an interim order and who had also applied totheD.L.O.as ajudgment creditorof defendant 5 for the sale of the property inquestion, tothe effect thatthere is 15 great depreciation of thevalue of the money of his client with the passage of time and, also, depreciation of the buildings standing on thesubject property. Inreaching hisconclusion on the balance of convenience, it appears that the learned trial Judge failed to take into consideration and weigh properly in his mind the 20 following facts which were before him:(a)The fact that the interest on the capital of the mortgages in favour of the Holy Monastery of Kykko, first mortgagee, and the appellants, second mortgagees, which were contracted in 1971, had since a long timeaccumulatedas todouble theamountof the 25 capitalwhich was £68,000.- andthatever since,nointerestcan be charged, with the result thatthetwo mortgagees were losing over £6,000 a year of interest on their capital, plus any interest which they could have recovered if the accrued interest had been paid. (b)The fact thatthere had been long and abortive proceedings 30 since 1973 by respondent 5 either alone or together with other creditors of his, and on one occasion by the present respondent, always taken on theeve of thedate of thesalefixed by theD.L.O. in an efford to have such sale called off to institute the present proceedings and take steps for the calling off of such sale. 35 (c) That the respondent as one of the judgment-creditors of defendant 5, though duly notified by theD.L.O.oneach timethat a sale was fixed with a reserve price originally of £1,500.- then increased to £136,000.- and then to £162,000.- he never raised any objection to such reserve price and waited till all efforts of 40 S62 10 1 C.L.R. Ν.P.Lanitis Ltd. v.Pavlou S a w i d e sJ . defendant 5 failed and a few days before the sale fixed by the D.L.O. to.institute the present proceedings and take steps for the calling off of such sale. (d)Another factor which should have been considered by the 5 trial Judge in view of the allegation of the appellants in their affidavit thatthe respondent had norightatthislate stage to raise such matter,was whether the proceedings so far taken in respect of thesaleof thisproperty mighthave savoured of anabuse of the process of theCourtdirectedtowards thefurther postponementof 10 the sale. In the present case having carefully considered all the material circumstances as appearing inthevarious exhibits andthe history of these proceedings as related earlier, we have reached the conclusion that the interim order was granted on insufficient 15 grounds and, therefore, we allow the appeal and discharge the interim order. 20 We take thisopportunitytostress thedesirability ofspeedy trials incases of thisnature. Inthelight of ourfindingsasabove andour observations, we remit the case back to the District Court to be tried on its substance and bearing in mind its nature, this case should be afforded the opportunityof an early trial. Costs of thisappeal infavour of theappellants, defendants 3. Appeal allowed with costsin favour of appellants - defendants 3. 25 563