|
|
Home
| Databases
| WorldLII
| Search
| Feedback
Court of Appeal of Fiji |
IN THE COURT OF APPEAL, FIJI
ON APPEAL FROM THE HIGH COURT OF FIJI
CIVIL APPEAL NO. ABU 154 of 2018
(High Court of Suva High Court Action No. 77 of 2015)
BETWEEN:
BIJAY PRASAD
PUSHPA WATI
Appellants
AND:
R. PRASAD LIMITED
Respondent
Coram : Basnayake, JA
Lecamwasam, JA
Almeida Guneratne, JA
Counsel: Mr K. Jamnadas for the Appellants
Mr C.B. Young for the Respondent
Date of Hearing : 3 February, 2022
Date of Judgment : 4 March, 2022
JUDGMENT
Basnayake, JA
[1] I agree with the reasoning and the conclusions arrived at by Almeida Guneratne, JA.
Lecamwasam, JA
[2] I agree with the reasons and the conclusions arrived at by Guneratne, JA.
Almeida Guneratne, JA
[3] This is an appeal against the judgment of the High Court dated 29th November, 2018. By that judgment the High Court allowed the Plaintiff-Respondents’ (Respondent’s) claim for specific performance against the Appellants (Defendants) in seeking the transfer of a property (the property) and to hand over vacant possession of the same. The judgment of the High Court is contained at pages 3 to 11 of volume 1 of the Record of the High Court (RHC). The Notice and Grounds of Appeal are found at pages 1 to 2 of Volume 1 of the RHC.
The Plaintiff-Respondent’s case
[4] The parties agreed to a Sale and Purchase Agreement (SPA) dated 24th May, 2014. Although by 4th November, 2014 the Respondent was ready to complete the transaction, on 19th November, 2014 the Appellants withdrew from the transaction and cancelled it.
(The Statement of Claim is at pages 111 to 114 of Volume 1 of the RHC).
The Defendants’- Appellants’ Defence
[5] The Appellants alleged that the Respondent was in breach of:
(a) Clause 3a of the agreement in failing to pay the deposit of $28,000.00 on 24th May, 2014;
(b) Clause 4.1 of the agreement in failing to pay the purchase price of $280,000.00 on 23rd July.
[6] The Appellants also filed a counter-claim.
(The Appellants Statement of Defence and counter claim is at pages 118 to 124 of Vol.1 of the RHC; the Amended Statement of Defence and counter claim is at pages 168 to 176; the Reply to Defence and counter claim at pages 126 to 132 and the Reply to the Amended Statement of Defence and counter claim at pages 178 to 184 thereof).
Preliminary Reflections
[7] As would be apparent from the rival stances taken by the parties the issue for determination by the High Court was whether the Respondent was in breach of the contract (as per Clauses 3a and 4.1 of the Agreement in question).
[8] If the Respondent was to be found in breach then it followed that it was not entitled to a judgment for specific performance.
The High Court’s findings on the said issues
[9] I shall first take the alleged breach of clause 3a of the Agreement.
[10] Clause 3 taken as a whole provided as follows:-
“Price and Deposit”
The full purchase price for the said property shall be $280,000.00 (Two Hundred Eighty Thousand Dollars). The sum of $280,000.00 (Two Hundred Eighty Thousand Dollars) shall be paid and satisfied by the purchaser as follows:-
[11] On the face of Clause 3a it is clear that it does not refer to a 24th May, 2014 but to the date of signing the agreement. Thus, although the agreement is dated 24th May, 2014, the material date was the date of signing the agreement. Although the Appellants had signed it on 24th May, 2014 in the USA, the Respondent had signed it on 28th July, 2014 in Fiji. (Vide: Rattan Deo’s evidence (Shareholder and Director of the Respondent Company) – page 433 of Vol.2 of the RHC.
Consensus ad Idem
[12] It is trite law that for a contract to be formed there has to be an agreement of the minds. That happened only when the Respondent signed. Indeed as the learned High Court Judge observed, “the Agreement came into effect on the day the agents of the plaintiff Company signed it” (paragraph [12] of the High Court Judgment. On 28th July, 2014 the deposit of $28,000.00 was made (exhibit ‘P12’). Consequently there was compliance with clause 3.1 of the Agreement. Furthermore, the defendants had not raised any objection to the deposit being made on 28th July, 2014. (Rattan Deo’s evidence at page 436 of Vol.2 RHC) and Nands Law receipt No.0153 receiving the deposit of the Purchase Price) (Exhibit ‘P12’ at page 507 of Vol.2 RHC).
Re: Clause 4 of the Agreement
[13] The clause in question was contained in the following terms:
“4.1 The date of settlement shall be within sixty (60) days from the date of signing of this agreement or such other date as may be mutually agreed in writing between the parties.”
[14] I have already held the date of signing of the agreement was 28th July, 2014. Thus, the terminal date of settlement would have been 27th September, 2014. However, it was on 31st October, 2014 that the Appellants executed the transfer document. (Exhibit ‘P13’ – page 507 of Vol.2 RHC and Exhibit ‘P14’ – letter from Nands Law dated 4th November, 2014 confirming the transfer. Page 537 of Vol.2 of RHC).
[15] At that point the Appellants were clearly estopped from resiling from the Agreement.
Estopped by conduct
[16] One is reminded of the classical statement that “A man may not deny _ _ _ that whereof he wilfully estopped or excluded himself by deed indented” (Vide: page 683 The Shorter Oxford English Dictionary Clarendon 1973).
[17] In legal terms estoppel is “an impediment or bar to a right of action arising from a man’s own act or where he is forbidden by law to speak against his own deed.” (Wharton 1531, Shorter Oxford (supra).
[18] As for the Respondent (who had sought specific performance) it has not been in breach of any terms of the contract independent with those undertakings of the Appellants.
(vide: Australian Hardwoods Pty Ltd –v- Commissioner of Railways [1961] 1 All ER; [1961] ALR pp. 742, 762 respectively).
[19] This brings me to look at the grounds of appeal urged by the Appellants.
Grounds 2 and 3
[20] The Appellants have waived these grounds. (vide: paragraph 1.2 of the Written Submissions filed on 4 February, 2020). The said grounds pertained to the stamping of the transfer document by the Commissioner of Stamp Duties and the alleged delays that are said to have taken place which the Appellants sought to ascribe to the Respondent.
[21] This allegation which involved exhibit ‘P26’ in any event was rendered academic (vide: paragraph [10] of the High Court Judgment).
Ground 4
[22] Learned Counsel for the Appellants took particular exception to what the learned Judge stated in paragraph 16 of his judgment viz:
“Under Clause 20 of the Sale and Purchase agreement it is the responsibility of the vendors to obtain an assessment of capital gains tax and pay it to FRCA. Until this is done the transaction cannot be complete. Therefore the delay is on the part of the Defendants and they cannot say that the plaintiff caused the delay in completing the transaction.”
Clause 20 of the Sale and Purchase Agreement
[23] The said clause provided as follows:
“20. Costs and Disbursements
The vendors shall bear all solicitors costs including all disbursements of preparing and stamping this agreement and of all other documents to be made pursuant hereto including stamp duty and registration fees and also they shall pay any Capital Gains Tax which may be assessed by the Commissioner of Inland Revenue Department that may be payable herein.”
[24] It is clear therefore that:
[25] Consequently, I could not quite comprehend (Mr) Jamnadas’s contention that there was a delay on the part of the Respondent in regard to having the transfer stamped by the Commissioner of Stamp Duties.
[26] It follows therefore that there was no error in the judgment of the High Court and accordingly ground 4 urged in the grounds of appeal must necessarily fail.
Grounds 1, 5, and 8
[27] Here again the Appellants re-agitated their lament in regard to the issue on stamp duty. (vide: paragraph 3.1 of their written submissions). The Appellants submitted that, as raised at paragraph 14 of the Amended Defence and Counterclaim, the Respondent was not ready to settle. This paragraph (at page 159 of Vol. 1 of the RHC) is only a bare denial of paragraph 13 of the Respondent’s claim that “the delay in settlement was caused by the defendants awaiting the capital Gains Tax Certificate.”
[28] This brings me to consider first, the factual content of readiness and willingness of a party to perform his obligations in a suit for specific performance and secondly the principles pertaining thereto.
The factual content of readiness and willingness of a plaintiff to perform his obligations in a suit for specific performance.
[29] The Appellants in their written submission adduced the following reasons in arguing that the Respondent was not entitled to the equitable remedy of specific performance in that the Respondent did not show readiness and willingness to perform its obligations.
[30] The Appellants argued the Respondent did not show it had available funds to complete the transaction although the Respondent’s Director said in evidence that the Respondent had sufficient funds. This contention appears to flow from the reasoning that the Respondent did not show bank statements. (vide: paragraph 3.3 of the Appellants’ written submissions). However, the learned judge took note of the fact that the Director testified that he was always prepared to pay the balance purchase price and at that time they had more than two million dollars in the Company’s accounts.
[31] The Appellants then advanced the contention that the Respondent’s cheque for stamp duty was subsequently cancelled _ _ _ nor was any excuse given for the non-payment of stamp duty (paragraph 3.3 of the Written Submissions of the Appellants)
[32] As observed earlier this argument is in the teeth of Clause 20 of the Agreement.
[33] The Appellants in paragraph 3.5 of their written submissions submitted:
“In this regard, the Respondent acknowledged in their pleadings that they were to have taken the Transfer document and paid stamp duty to the Commissioner of Stamp Duties, who would have then stamped the Transfer.”
[34] This I regret to say is a completely misconceived if not misleading submission taken out of context.
[35] The Respondent in its Statement of Claim in seeking specific performance sought orders praying that the Appellants be ordered.
“A. (i) to lodge within 7 days of the date of the Order a completed and signed Capital Gains Tax Declaration and the signed Transfer with Fiji Revenue and Customs Authority for assessment of Capital Gains and Stamp duty respectively;
(ii) to pay the assessed capital gains tax or undertake to pay the same from the sale proceeds and to pay the stamp duty provided by the plaintiff so as to obtain release of the CGT Certificate and the stamped transfer;
(iii) to effect settlement of the sale and purchase at the Registrar of Titles Office, Suva within 7 days after release of the CGT Certificate and the stamped transfer; and
(iv) _ _ _ _ _ _ _”
Why did the Respondent pray in that way?
[36] Because the Appellants had failed in the obligations in regard to the stamping and procuring the Capital Gains Certificate. Thus, in order to have the transfer settled the Respondent had to provide the stamp duty. It is this prayer which the Appellants have chosen to misinterpret in their submissions in saying “the Respondent acknowledged in their pleadings that they were to have taken the transfer document and paid stamp duty _ _ _ _”.
[37] In the result, even assuming that the Respondent could have been found to have been responsible for some delay (see: page 449 Vol.2 RHC) they had to be regarded as being in relation to inessential terms which could not deny to it the decree it sought. (see: Mehmet –v- Benson [1965] HCA 18; [1965] 113 C.L.R. 295 at pp. 307 – 308, 314.
[38] The final lid on the matter of the contract was put for the reasons I have recounted in relation to clauses 3a and 4.1 of the Agreement.
[39] Indeed as it has been said “A plaintiff in equity may even have actually broken his contract in the letter and yet succeed if the substance remains. (Fullers Theatres Ltd –v- Musgrove [1923] HCA 12; [1923] 31 CLR 524 at p.550).
The Remedy by way of specific performance – function of the Court
[40] The learned High Court judge referred to several decisions justifying the granting of a decree for specific performance. (vide: paragraph [19] of the judgment).
[41] I myself would venture to add in striking a common chord with, Isaacs J who, conceiving justice as being the aim of the remedy of specific performance articulated thus:
“It cannot be too clearly borne in mind that the function of the Court in such cases is to complete justice – by requiring a party to specifically carry out a contract he has made, in the very way he agreed to do.”
Goldsbrough Mort and Co. Ltd –v- Quinn [1910] HCA 20; [1910] 10 CLR 674 at p.697.
[42] The conduct on the part of the Appellants in seeking to resile after the transfer document was executed for their own unilateral reasons was found fault with by the learned High Court Judge. I endorse His Lordship’s reasons in that regard. The learned judge’s reasons effectively answers Ground 8.
[43] In the facts and circumstances of the instant case as recounted above, the Appellants who kept the contract on foot until they cancelled it for their personal reasons cannot be allowed to rely on the strict time lines contemplated by the terms of the initial contract (page 449 of Vol. 2 RHC) and the Respondent in its suit for specific performance can put itself right by establishing readiness or willingness at the date of institution of proceedings, at the commencement of the hearing, or “semble, in certain circumstances, even before the date of the judgment” (vide: Commonwealth Oil Refineries Ltd –v- Hollins [1955] VicLawRp 42; [1956] V.L.R 169.
[44] The Respondent as Mr Young submitted is still ready and willing “to settle.” Indeed, an attempt to show that the Respondent had no sufficient funds to purchase the property had failed. (vide: page 445 of Vol.2 RHC).
Ground 6
[45] This is couched in general terms which has been elaborated on in the other specific grounds urged.
[46] I could not find anything in the case of Ward –v- Chandra [2016] FJSC 30 and the other authorities cited by learned Counsel for the Appellants which could have assisted the Appellants arguments.
[47] On the contrary, the case of MacDonald –v- McMullin referred to in (1938) 12 ALJ 203 cited by Mr Young on behalf of the Respondent helps the Respondent to demonstrate the Respondent’s readiness and willingness to settle.
Mr. Young’s application
[48] At the conclusion of the hearing Mr Young brought to the attention of Court that he was holding on to the documents in question and should this Court find in his favour that he be granted the relief prayed for in paragraph B of the prayer (claim) to the Statement of Claim.
(page 114 of Vol.1 RHC) viz:
“B. An Order that if the Defendants or any of them refuse or fail for any reason to sign any document required to complete the sale and purchase Agreement in terms of Order A above, and such refusal or failure has continued for 7 days after a written notice to sign has been given to them (or as the Court may otherwise direct), then in that case the Chief Registrar of the High Court of Fiji at Suva be authorized to sign all such documents for and on behalf of the defaulting Defendants and the Chief Registrar so signing shall not be held liable personally or otherwise.”
Conclusion
[49] For the aforesaid reasons I reject the grounds of appeal, dismiss the appeal and allow Mr Young’s said application.
Orders of Court
............................................................................
Hon. Justice E. Basnayake
JUSTICE OF APPEAL
............................................................................
Hon. Justice S. Lecamwasam
JUSTICE OF APPEAL
............................................................................
Hon. Justice Almeida Guneratne
JUSTICE OF APPEAL
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/fj/cases/FJCA/2022/22.html