Tonga Defamation Case Backfires, Business Found To Be Illegal

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Chicken importer allegedly hid foreign ownership

NUKU‘ALOFA, Tonga (Matangi Tonga, March 31, 2015) – An attempt by a major frozen chicken importer, Moapa Enterprises Ltd., to sue its shipping agent for defamation has backfired when it was found that the foreign-owned company was trading illegally in activities reserved for Tongans.

Mr Justice Scott struck out the defamation claim by Moapa Enterprises Ltd. against Derek Leonard, Pacific Forum Line (NZ) Ltd. and Eckington Ltd.

Rudra Prasad of Fiji, an owner of Moapa Enterprises Ltd., had filed the civil defamation claim for himself as first plaintiff and his company, as second plaintiff.

At an interlocutory hearing applied for by the defendants, Mr Justice Scott found that the second plaintiff Moapa Enterprises Ltd. could not claim damages from diminution of profits derived from trading in breach of the provisions of the Foreign Investment Act.

"In my view such an action is an abuse of the process of the Court," Mr Justice Scott stated in his decision on the application on February 27. He cited precedents whereby, "losses caused to an activity shown to be illegal are not recoverable."

The judge found that the importer had concealed the fact that it was a foreign investor.

However, he stated that at this interlocutory stage the court was evaluating evidence placed before it on the application from the defendants but, "it is not in a position to conduct a trial of the matter complained of."

The judge stated: "on the uncontradicted evidence before me I find it plain that the second plaintiff has been trading under a business licence, which would not have been issued to it had it not concealed the fact that it was actually a ‘Foreign Investor’. Whether or not a criminal offence has been committed is not, in my view the question that has to be answered in this application in this court."

Refrigerated containers

Rudra Prasad is the Managing Director of the company that has been trading in Tonga as a grocery wholesaler and retailer since it was incorporated here in 2002.

Tonga has a multi-million pa‘anga market for frozen chicken, and Moapa is among the biggest importers. A significant component of the company’s business is the import of frozen chickens from the United States. The chicken was sold at the JM Store and through other outlets.

Some of the frozen meat was imported into Tonga in refrigerated containers carried on vessels operated by Pacific Forum Line (NZ) Ltd., and Derek Leonard was the general manager of both PFL and Forum Shipping Agencies in Tonga.

The civil defamation action arose from a dispute between the parties over demurrage charges. (Demurrage is a penalty assessed by shippers for reasons that can include delays in returning containers or transportation equipment.) This led to several emails being sent by the first defendant, which the plaintiffs say were defamatory and resulted in loss and damage to them.

A defence has been filed that denies the defamation.

P. Rzepecky with R. Stephenson acted for the defendants in the application, while B. Goldsmith with Ms. P. Tupou acted for the second plaintiff as respondent.

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