Air Van’s application to suspend Deed enforcement dismissed

The Supreme Court has declined an application for suspension of enforcement of a Deed of Settlement signed between Air Vanuatu and Isleno Leasing Company Limited to resolve the issue of a lease agreement on an islander aircraft.

This application for suspension of enforcement was made following a Supreme Court decision on August 20.

On August 20, 2018 the Supreme Court entered a judgment in favour of Isleno.

Justice Andreé Wiltens stated in his decision on August 20: “Unless the Deed could be set aside in some manner, it committed AV (Air Vanuatu) to pay within 7 days of the signing Vt51,809,325 and to immediately commence operating the aircraft in accordance with the original contract.

“The lease provided for termination costs of Vt2,100,000 per month for the remainder of the lease term.

“The Deed also provided for the interest to run at 15% per annum on the sum of Vt51,809,325 from 24 October 2011 and on the termination sums of Vt25,200,000 from 31 October 2011."

The Judge had stated that the Deed cannot be set aside by Air Vanuatu as they are caught by the indoor management rule and section 193 of the Companies Act.

“There is no evidence at all, apart from suspicion from the surrounding circumstances, that Ms Ngwele either knew or ought to have known that AV did not properly executive the Deed.

“The only finding I can make, on evidence, is that Ms Ngwele signed the Deed in the expectation that AV would validly enter into the settlement agreement with Isleno.

“It follows that the terms of the Deed are binding on AV,” Justice Wiltens stated in his judgment of August 20.

The application for suspension of enforcement by Air Vanuatu’s lawyer, Edward Nalyal, was based solely on an appeal that has been filed by the airline against the decision of the Court of August 20.

Isleno’s lawyer, Robert Sugden, had submitted in the application for suspension by Air Vanuatu that Rule 13.4 of the Supreme Court Rules in A.A. Jenshel’s Civil Court Practice Vanuatu makes it plain that suspension is not automatic in the circumstances of an appeal being filed as something more needs to be established, such as; - a demonstrable desire to simply delay; - where the enforcement could ruin the enforcement debtor; -the possibility that any funds paid over might be able to be recouped if the appeal is successful, or; -that the appeal would be rendered nugatory if suspension were not granted..

Nalyal submitted that his client was entitled to appeal and there was not suggestion of simply delaying.

Justice Wiltens asked Nalyal if there was something in his grounds of appeal he could point to which would demonstrate likely success such as some error, misdirection or omission.

But Nalyal stated it is a matter for the Court of Appeal to determine.

The judge said he was looking for something more other than a mere fact of appeal to assist in whether or not to order suspension but couldn’t find any so the application was dismissed on September 5, 2018.

The case goes back to 2009 when Air Vanuatu entered into a lease agreement with Isleno for the lease of an Islander aircraft on September 30.

Air Vanuatu repudiated that lease agreement on November 12, 2009.

Then on December 2009 Isleno sued Air Vanuatu before a Deed of settlement was signed between the parties to resolve civil case No. 189 of 2009.

Peter Fogarty signed on behalf of Air Vanuatu and witnessed by Chairman (Ioan) Mariasua and it was counter-signed by Ms Ngwele as Director of Isleno, and witnessed by a Mr Mata.

Air Vanuatu repudiated the Deed and another case commenced in 2011 whose enforcement judgment was made on August 20, 2018.

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