Chand v Weddell Crown Corporation Ltd [1990] FJCA 4; Abu0013u.88s (18 May 1990)

Fiji Islands - Chand v Weddell Crown Corporation Ltd - Pacific Law Materials

IN THE FIJI COURT OF APPEAL

CIVIL JURISDICTION

CIVIL APPEAL NO. 13 OF 1988
(High Court Civil Action No. 230 of 1988)

BETWEEN:

RAJESH KARAM CHAND
Appellant

AND:

WEDDEL CROWN CORPORATION LIMITED
Respondent

Date of Hearing: 14th March, 1990
Delivery of Judgment: 18th May, 1990

JUDGMENT OF THE COURT

This is an appeal from the Judgment of Mr Justice Jesuratnam dated the 30th September, 1988 pursuant to an application for summary Judgment under Order 14 Rules of the High Court made by the plaintiff the Respondent in this appeal.

The plaintiff's claim was for the sum of F$10,000 pursuant to the terms of a guarantee signed by the appellant and one Indar Prasad who has left Fiji.

The two of them, the appellant and the said Indar Prasad, executed the guarantee jointly and severally guaranteeing payment by a firm, Supreme Frozen Foods, for all goods and services supplied by the Respondent to that firm.

The grounds of appeal are as follows:

"1. THAT the learned Judge erred in law and in fact in entering summary judgment against the Appellant.

2. THAT the learned Judge erred in law and in fact in that he failed to properly evaluate the affidavit evidence which disclosed substantial dispute in so far as the merits of the case was concerned.

3. THAT the learned Trial Judge erred in law and in fact when he decided the issue of credibility purely on the affidavits."

The three grounds can be conveniently considered together.

Before the Order 14 summons was taken out the defendant/appellant had delivered a Statement of Defence.

Paragraphs 1, 2, 3 & 7 of the Statement of Defence raised a number of defences. Those paragraphs are as follows:

"1. THE Defendant denies each and every allegations contained in paragraph 1 of the Statement of Claim except that Supreme Frozen Foods received meat from Plaintiff for $9,000.00 (NINE THOUSAND DOLLARS) and this has been paid in full.

2. AS to paragraph 2 of the Statement of Claim the Defendant says as follows:-

(i) the Memorandum of Guarantee is not a binding contract as it lacks consideration;

(ii) the Memorandum of Guarantee is void and/or unenforceable under the Guarantee Indemnity Bailment Act.

3. _THE Defendant admits that $9,000.00 (NINE THOUSAND DOLLARS) was paid to the Plaintiff and says that it was in full and final settlement. The Defendant further says that at no time did Supreme Frozen Foods enter into any transaction with the Plaintiff in New Zealand dollars and further says that the transactas in Fiji dollars.

7. THE Defendant further says the Plaintiff's claim is not enforceable under provisions of the Sale of Goods Act as no invoices or no proper invoices were made at the times of the purported sales."

The Respondent's manager Mr Chris Bing some weeks after the Statement of Defence had been delivered made an affidavit in which he made a statement in paragraph 10 as follows:-

"10. THAT I am advised and verily believe that the Defendant has no valid Defence to the Plaintiff's claim and I am further advised that the Defendant has filed a sham Defence with the view to prolonging the payment of the debt which he justly owes to the Plaintiff."

Mr Bing did not attempt to answer the allegations in the Statement of Defence other than to call it "a sham defence".

The notes in the "white book" make it clear that the Order 14 process should only be used in proper cases and should not be used for tactical purposes (per Scott LJ in DOTT v. BROWN (1936) 1 ALL E.R. 545).

Our perusal of the Statement of Defence shows that a number of Defences had been raised by the defendant/appellant and in our view the instant case was not a proper case to invoke Order 14.

The main defence is that the $9,000 was paid in full and final settlement of Supreme Frozen Foods account.

There is also a legal argument raised in paragraph 7 of the Defence. Unless a seller of goods on credit complies with the provisions of section 6 of the Sales of Goods Act, a sale shall not be enforceable by action at the suit of a seller.

Section 6 of the Act is as follows:

"6. - (1) A sale of goods on credit or an agreement to sell goods on credit in the course of trade shall not be enforceable by action at the suit of the seller, unless-

(a) at the time of the sale or agreement to sell, an invoice or docket, serially numbered, be made in writing in duplicate both original and duplicate containing-

(i) the serial number

(ii) the date of the transaction;

(iii) the name of the buyer;

(iv) the nature and, except in the case of goods exempted from this provision by order of the Minister, the quantity of the goods, in the English language and in figures;

(v) the price in English words or figures; and

(b) at the time of delivery of the goods, original or duplicate of the invoice or docket be delivered to the buyer or to some person to whom the goods may properly be delivered on his behalf.

Provided that the provisions of this section shall not apply to an agreement to sell, over a period of time, goods of nature such as are commonly delivered at regular intervals, such as newspapers, bread or milk, or to any sale in pursuance of such agreement, where a written order signed by the buyer or his agent in that behalf is given to the seller at the time of the agreement to sell.

(2) In this section-

"docket" includes a packing note, delivery note or other printed form customarily used for recording the particulars of a sale; "sale or agreement to sell in the course of trade" means a sale or an agreement to sell to a person by or on behalf of a person who carries on the business of selling goods."

The appellant in his affidavit in Reply to Mr Bing enlarged on his Defence.

Mr Bing made a further affidavit in which he made the following statement:-

"The exchange rate at the time was equivalent to one Fiji Dollar to NZ$1.6032 which rate when applied to the price of the consignment of NZ$19526.75 gave the value of the consignment in Fijian Dollars in the sum of $12,180.00"

A perusal of the Statement of Claim indicates that the appellant had paid F$9,000 which would leave a balance of F$3,180 to be paid yet the plaintiff/Respondent claims F$10,000.

Apart from this patent defect in the Statement of Claim, the particulars of claim allege the sale of the consignment of lamb was of a total value of NZ$19,526. The four payments made by the appellant were each converted to New Zealand currency and totalled NZ$9,147.20. This sum was deducted from the NZ$19,526.75 leaving a balance of NZ$10,379.55.

The guarantee was limited to F$10,000.

The plaintiff/Respondent company is a subsidiary of a New Zealand company. The allegations in the Statement of Claim raises a very strong inference that the sale to Supreme Frozen Foods (it is not clear whether this is a firm or a limited company) was by the New Zealand company. If that proves to be the case the appellant has a legal argument that the guarantee has no validity.

In our view the learned Judge misconceived the nature of the Order 14 application. He was not required to "try" the proceedings on affidavit evidence.

All the defendant/appellant had to do under O.14 r.3 was to satisfy the court, with respect to the claim, or part of the claim, to which the application relates, "that there is an issue or question in dispute which ought to be tried........."

The learned Judge's Judgment reads like a Judgment after trial of an action. The learned Judge also appears to have lost sight of the fact that the defendant was being sued as a guarantor and not as a purchaser. This confusion is apparent from the following statement in the Judgment:

"It seems to me that Supreme Frozen Foods having paid F$9,000 to the plaintiff against this consignment is now taking up the false position that the dealing was in Fijian dollars and that the sum paid to the plaintiff is all that Supreme Frozen Foods had to pay to the plaintiff. It seems to me that the defendant has woven his defence around the admitted payment of F$9,000."

On our perusal of the Statement of Claim and the Statement of Defence there were issues raised by the defendant/appellant which ought to be tried. The learned Judge was not required to 'try' those issues.

We have demonstrated that in any event a substantial error in the Statement of Claim which is sufficient justification for setting aside the Judgment.

The appellant has paid the sum of $10,000 into court which counsel have agreed should remain in court.

The appeal is allowed with costs as agreed by counsel to be costs in cause.

The Judgment is set aside on terms that the $10,000 paid into court remain in court until finalisation of the action.

The appellant is given leave to defend the action.

Sir Timoci Tuivaga
President, Fiji Court of Appeal

Sir Ronald Kermode
Justice of Appeal

Sir Moti Tikaram
Justice of Appeal

Abu0013u.88s